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Company A has a floating charge over its inventory. The charge agreement states: “If the company fails to pay interest for two consecutive months, it must cease selling its inventory.” Company A misses two interest payments. Does this clause effectively crystallise the charge?
Thanks a lot, sir Mike!
I can think of no argument to suggest that the default by Company A would not crystallise the charge. The double interest default clearly kicks in the crystallisation.
Incidentally, what does the suggested solution propose? And, if it’s in agreement with my proposition, what was it about the solution that you were not happy with (otherwise you wouldn’t have asked for confirmation!)
OK?
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