Enforcement of Securities
When a borrower has a problem in servicing or re-paying a loan
it is obviously preferable for a solution to be worked out that
doesn't involve the lender taking action to enforce his security.
In the current market much more time is devoted to what have come
to be known as "workouts" than enforcement. Although it's
preferable to negotiate both the lender and borrower should be
aware of the different methods of enforcement and whether there are
any obstacles in the lender's path which would delay or prevent
enforcement. The positions of creditors with competing interests,
eg landlords, also need to be taken into account.
Situations where the enforcement of securities is an issue can
range from the administration of a large retailer, eg Woolworths,
to mortgage possession proceedings of someone's home. Common
methods of enforcement of securities include the appointment of
administrators and receivers, and the possession and sale of a
A lender who suffers a shortfall between the amount of the debt
and the amount realised for the secured property will often
consider whether he has any collateral claims, including
professional negligence claims against the valuers and solicitors
who were engaged in relation to taking the security.
We are able to advise lenders (and other creditors) and
borrowers on breaches, remedies, workouts and restructuring.