Last Updated October 08, 2019

Law and Practice

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Winston & Strawn London LLP provides a wide range of legal services through its banking and finance practice, to public and private companies, leading financial institutions, multilateral and development finance institutions, private equity and investment funds, alternative funding sources, investors and emerging companies, on investment grade, leveraged and mezzanine financings. The firm advises on high-profile transactions and matters ranging from cross-border transactions, initial public offerings (IPOs) and project finance matters, to distressed acquisitions and creative “first-of-their-kind” financings. Clients include leading international funding sources which provide senior, subordinated, secured and unsecured debt, and hybrid (equity/debt) products, as well as institutional investors who regularly participate in senior debt markets, equity sponsors, and borrowers in both developed and emerging economies. Additional thanks to partners Ed Denny and Dan Meagher and associate Shaheer Momeni, among others, for their contributions to this chapter.

On insolvency, creditors' claims generally rank in the following order:

  • administrator’s or liquidator’s costs and expenses in realising fixed security;
  • fixed security;
  • expenses of the insolvent estate;
  • creditors preferred by statute, primarily employee claims and contributions to an occupational pension scheme (in practice, amounts may be fairly limited);
  • floating charges;
  • unsecured creditors; and
  • equity holders.

The Enterprise Act 2002 introduced the concept of a prescribed part, being a "ring-fenced pot" of money (up to a maximum of GBP600,000) which must be set aside for unsecured creditors out of the net floating charge realisations. 

The priority rules relating to the prescribed part do not apply to companies that are subject to a company voluntary arrangement or to floating charges that are financial collateral arrangements under The Financial Collateral Arrangements (No 2) Regulations 2003.

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Authors



Winston & Strawn London LLP provides a wide range of legal services through its banking and finance practice, to public and private companies, leading financial institutions, multilateral and development finance institutions, private equity and investment funds, alternative funding sources, investors and emerging companies, on investment grade, leveraged and mezzanine financings. The firm advises on high-profile transactions and matters ranging from cross-border transactions, initial public offerings (IPOs) and project finance matters, to distressed acquisitions and creative “first-of-their-kind” financings. Clients include leading international funding sources which provide senior, subordinated, secured and unsecured debt, and hybrid (equity/debt) products, as well as institutional investors who regularly participate in senior debt markets, equity sponsors, and borrowers in both developed and emerging economies. Additional thanks to partners Ed Denny and Dan Meagher and associate Shaheer Momeni, among others, for their contributions to this chapter.

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