Glossary

A · B · C · D · E · F · G · L · M · N · O · P · Q · R · S · U · W

A

Administrative receiver

A receiver of a company's whole business, answerable to the floating-charge holder alone. For a floating charge created on or after 15 September 2003, the holder may not appoint one (Insolvency Act 1986, section 72A). The Debenture is dated 24 April 2026, so that door is shut. The Bank's routes are an administrator, or a receiver over particular assets. Chapter 3 · Chapter 9

Administrator

A licensed insolvency practitioner who takes over the running of a company from its directors. The job is to rescue the company, or to get its creditors a better result than a winding up. The Bank may appoint one without going to court, because its floating charge is a qualifying floating charge (Insolvency Act 1986, Schedule B1, paragraph 14; Debenture clause 3.5). The administrator's expenses come out of the floating-charge assets before the Bank (Schedule B1, paragraph 99). Debenture §3.5 · Debenture §9.3 · Chapter 9

Assignment by way of security

A transfer of a right to the lender, to be transferred back when the debt is paid. Here the right is the Company's claim under its insurance policy. Clause 3.3 assigns the Insurances to the Bank, which becomes the person the insurer must pay. Clause 14.1(b) reassigns them at the end. Debenture §3.3 · Definition: Insurances · Schedule 4 · Chapter 5

B

Blocked account

A bank account the customer may not draw on without the bank's consent, given withdrawal by withdrawal. Under the waiver letter of 10 March 2028 the Collection Account became one from 16 March 2028. From that day the Bank's control of the proceeds was real. The charge over the Book Debts was then fixed in substance as well as in name. Debenture §8.3 · Chapter 8

Book Debts

The money customers owe the Company on unpaid invoices, plus every other debt owed to it and the proceeds of them all. They run at about £2,600,000 at any time. Clause 3.2(d) charges them by way of fixed charge, and clause 8.3 sends every receipt into the Collection Account. Whether the charge is fixed in law turns on control of that account, not on the label. Definition: Book Debts · Debenture §3.2 · Debenture §8.3 · Chapter 3 · Chapter 5

C

Certificate of registration

The document Companies House issues once a charge is registered. It is conclusive evidence that the particulars were delivered in time; nobody, not even a liquidator, can go behind it (Companies Act 2006, section 859I). The Bank's came on 7 May 2026. It is the document the file must hold, not the filing receipt. Chapter 6

Charge

The general word for security that leaves ownership where it is. The asset stays the Company's, but the Bank can have it sold and be paid first from the price. A fixed charge sits on a named asset. A floating charge hovers over a changing pool. A mortgage goes further: it transfers ownership, or is treated as doing so. Debenture §3 · Chapter 1

Clawback

A rule that lets an administrator or liquidator undo something the company did before its insolvency. The one aimed at floating charges is section 245 of the Insolvency Act 1986; see New money. Section 238 reaches a transaction at an undervalue, where the company gave away more than it received. Section 239 reaches a preference: paying one creditor ahead of the rest. A payment later clawed back revives the security (clause 14.2). Debenture §14.2 · Chapter 9

Collection Account

The account in the Company's name at the Bank that receives the proceeds of every Book Debt. Nothing may be withdrawn from it "except as the Bank permits" (clause 8.3). It is under a fixed charge (clause 3.2(e)) and needs no notice, because the Bank holds it. From Utilisation to 15 March 2028 the Company drew on it freely; from 16 March 2028 it was blocked. Definition: Collection Account · Debenture §3.2 · Debenture §8.3 · Chapter 5 · Chapter 8

Conditions precedent

The things that must exist before the Bank has to lend. On this file: the signed Facility Agreement and Debenture; the board minutes and shareholder resolution of 23 April 2026; the valuation; the searches; the outgoing lender's payoff letter; the deeds and share papers; the legal opinion. The junior owns the checklist. The Bank paid out on 30 April 2026 because every line was ticked. Chapter 10

Continuing security

Security for whatever is owed from time to time, not for a fixed sum. The Debenture is not satisfied by any intermediate payment (clause 15.1). Nor is it affected by a waiver, or by an amendment of the Facility Agreement. Three instalments of £750,000 reduced the Term Loan to £9,750,000 and released nothing. Debenture §15.1 · Chapter 10

Corporate benefit

The reason a company's directors must have before it helps another company. A director's duty is to promote the success of his or her own company (Companies Act 2006, section 172). Tooling receives none of the loan, so on 23 April 2026 its board minuted why guaranteeing its parent serves Tooling. The new machining hall will make the parts Tooling's fixtures are made for, and the group's bank relationship is Tooling's overdraft too. The Company, as sole shareholder, approved by written resolution the same day. Definition: Guarantor · Chapter 7

Covenant

A promise made in a deed. The covenant to pay (clause 2.1) is the Company's promise, repeated in the security document, to pay everything it owes the Bank. Without a debt there is nothing to secure. Clause 5.1 is a covenant to do everything needed to register the charge. It is the right thing to have and the wrong thing to rely on: damages from an insolvent company are worth little. For the promises about the Company's figures, see Financial covenants. Debenture §2.1 · Debenture §5.1 · Chapter 1 · Chapter 6

Crystallisation

The moment a floating charge stops hovering over a pool and fastens onto each asset as a fixed charge. This workbook says the charge "fixes". From then the Company may not deal with those assets without consent. Under clause 4.1 the Bank may fix the charge by notice, on an Enforcement Event or where an asset is in jeopardy. Under clause 4.2 it fixes by itself on three events: the Company giving other security, a disposal outside its day-to-day trade, or a winding-up petition or administration application. Fixing is not enforcing; the powers to sell wait for an Enforcement Event. Debenture §4 · Chapter 3

D

Debenture

The document by which a company gives a lender security over its assets, usually all of them at once. The Marlow Debenture of 24 April 2026 has fifteen clauses and five schedules. It contains a legal mortgage over the factory, fixed charges, an assignment of the insurance, and a floating charge over everything else. The Company signed it as a deed, the more formal way of signing, by two directors. A lender's statutory powers to sell and to appoint a receiver belong to a mortgage made by deed (Law of Property Act 1925, section 101). The Debenture · Execution · Chapter 1

Deed of priority

A deed between two secured lenders and the borrower. It fixes the order in which their securities rank and what each may do to enforce. No second lender ever came to the Company. Had one come above the £750,000 cap, the Bank's consent would have carried this condition. Three paragraphs: ranking, a standstill, and turnover of anything the newcomer receives. Chapter 7 · Chapter 10

Deed of release

A short deed by which a lender gives up its security and confirms it is owed nothing more. Kite Receivables Finance Limited, the Company's outgoing invoice discounter, gave one dated 30 April 2026 against payment of £1,900,000. The Bank gives its own at the end of the Security Period (clause 14.1). Alongside it go form MR04 at Companies House and form DS1 at HM Land Registry. Debenture §14.1 · Chapter 2 · Chapter 10

E

Enforcement Event

An Event of Default which is continuing, plus the Bank's written notice to the Company that the security is enforceable. Only then may the Bank appoint a Receiver or an administrator, sell the assets or collect the Book Debts (clause 9.1). An Event of Default is a fact about the borrower; an Enforcement Event is a choice by the Bank. On this file the notice was never sent. Definition: Enforcement Event · Debenture §9.1 · Chapter 8

Event of Default

An event the Facility Agreement lists as a default. It lets the Bank cancel the facilities and demand everything back at once, which is called acceleration. A breach of a financial covenant is one. The Interest Cover figure of 3.10:1 reported on 16 February 2028 was an Event of Default. It was not, by itself, enforcement. Definition: Event of Default · Chapter 8

F

Facility Agreement

The loan agreement of 24 April 2026 between the Company as borrower, Tooling as guarantor and the Bank as lender. It provides a Term Loan of £12,000,000, repayable over five years to 30 April 2031. It adds a Revolving Facility of £3,000,000, which can be drawn, repaid and drawn again. The Debenture secures everything owed under it. A Utilisation is a drawing under it; the first was on 30 April 2026. Definition: Facility Agreement · Recital (A) · Chapter 1

Financial assistance

Help a company gives — a loan, a guarantee, security — so that someone can buy shares in it or in its parent. The Companies Act 2006 forbids it only where a public company is involved (sections 678 to 680). The Company and Tooling are private companies, and the loan buys no shares. It is not in play. Chapter 7

Financial covenants

Promises about the borrower's figures, tested every quarter on the twelve months just ended. The Facility Agreement sets two. Interest Cover is profit divided by interest, and must be not less than 3.50:1. Leverage is borrowings less cash, divided by profit, and must be not more than 2.75:1. Each quarter the Company delivers a compliance certificate stating both. For the twelve months to 31 December 2027 Interest Cover was 3.10:1, and that was the breach. Chapter 8

Fixed charge

Security over a particular, identified asset. The Company may not sell, lease or lend it without the Bank's prior written consent (clause 6.2). When the asset is sold, the costs of sale come off and the rest goes to the Bank; nobody stands between. In the Debenture: the six machining centres in Schedule 2, the Tooling shares, the Book Debts, the Collection Account, and intellectual property and goodwill (clause 3.2). Debenture §3.2 · Definition: Fixed Charge Assets · Schedule 2 · Chapter 3

Floating charge

Security over a shifting pool of assets the Company keeps buying and selling: stock, work in progress, the older plant, the everyday accounts. The Company deals with them freely in its day-to-day trade until the charge fixes. It is weaker than a fixed charge. On an insolvency the administrator's expenses, the preferential debts and the prescribed part come out first. Clause 3.4 also catches any asset called fixed which is not effectively so charged. Debenture §3.4 · Definition: Floating Charge Assets · Chapter 3

G

Guarantee

A promise by one person to pay another's debt if that person does not. Tooling guarantees the Company's loan in clause 17 of the Facility Agreement, and is the Guarantor. A guarantee is a promise, not a claim on a thing. If Tooling failed, the Bank would rank equally with Tooling's other unsecured creditors. The family refused personal guarantees, and the Bank accepted. Definition: Guarantor · Chapter 1 · Chapter 7

L

Legal mortgage

The strongest security over land. For registered land the owner keeps its title and grants a charge by way of legal mortgage. That gives the lender the same protection, powers and remedies as a mortgage of the land itself (Law of Property Act 1925, section 87). Clause 3.1 charges the Property this way: the freehold factory at Cransley Park, title number NN587231. The charge takes effect at law only once HM Land Registry enters it on the title (Land Registration Act 2002, section 27). The Bank's was registered on 28 May 2026. Debenture §3.1 · Schedule 1 · Definition: Property · Chapter 4

Liquidator

The person appointed to wind a failed company up: to collect its assets, sell them and pay the creditors in the order the law sets. A charge not registered at Companies House within the 21 days is void against a liquidator, an administrator and any creditor (Companies Act 2006, section 859H). The Bank would then be an unsecured creditor. Chapter 6

Loss payee

The person the insurer must pay when a claim is met. The Company's insurer is Aldgate Mutual Insurance Society Limited. Clause 8.2 has the Bank noted as loss payee on the buildings and plant sections of the policy, but not on business interruption, which the Company keeps as its working capital. Aldgate acknowledged the notice on 12 May 2026. Money paid is applied as the Bank directs: to rebuilding, or to the debt. Debenture §8.2 · Schedule 5 · Chapter 4 · Chapter 5

M

Moratorium

The shield an administration puts around the company. While it lasts, nobody may enforce security against the company, or sue it, without the administrator's consent or the court's permission (Insolvency Act 1986, Schedule B1, paragraph 43). It binds the Bank too, although the Bank appointed the administrator. A receiver over the Property brings no such shield against other creditors. Chapter 9

Mortgage, mortgagee and mortgagor

A mortgage is a charge that transfers ownership of the asset to the lender, or is treated as doing so, until the debt is paid. The mortgagee is the lender holding it. The mortgagor is the borrower who gave it. A mortgagee's powers to sell and to appoint a receiver arise once the mortgage money is due (Law of Property Act 1925, section 101). The Debenture treats the debt as due from Signing, but lets the Bank use the powers only after an Enforcement Event (clause 9.2). Debenture §9.2 · Chapter 4

N

Negative pledge

The Company's promise not to create, or let exist, any other mortgage, charge, lien or security over any Security Asset (clause 6.1). The only exceptions are the Debenture's own security and Permitted Security. A lender fears a charge it did not take, because a later fixed charge can beat an earlier floating one. The promise shows on form MR01 (Companies Act 2006, section 859D). A breach fixes the floating charge over the asset by itself (clause 4.2(a)). Debenture §6.1 · Debenture §4.2 · Chapter 7

New money

Cash, goods, services or the discharge of a debt provided to the company at or after a floating charge is created. A floating charge created within twelve months before the onset of insolvency is invalid except to the extent of new money (Insolvency Act 1986, section 245). The period is two years for a connected person. The Bank lent £12,000,000 at Utilisation, six days after the Debenture, so its floating charge stands to that extent. Chapter 3 · Chapter 9

Notice of assignment and acknowledgement

A notice is a written statement to the person who owes a claim that the claim is now the lender's. Until told, an insurer may pay the company and treat the debt as gone. An acknowledgement is that person's written confirmation that it will act on the notice. Clause 5.3 has the Company give notice to each insurer, in the Schedule 5 form, on the date of the Debenture. Aldgate's acknowledgement came on 12 May 2026. The Collection Account needs neither, because the Bank holds it. Debenture §5.3 · Schedule 5 · Chapter 5

O

Official search with priority (form OS1)

A search of a registered title at HM Land Registry which also opens a priority period. During that window any application the searcher lodges is protected against anyone else's. At the time of writing (2026) the window is 30 business days under rule 147 of the Land Registration Rules 2003; check the current figure. A business day is a day other than a Saturday, a Sunday or a bank holiday in England. The Bank's solicitors searched title NN587231 in the Bank's favour on 20 April 2026. The window ended on 3 June 2026, and registration was completed on 28 May. Debenture §5.1 · Definition: Business Day · Chapter 4

P

Payoff letter

A letter from an outgoing lender stating the exact sum which, paid on a stated day, discharges everything it is owed. Kite Receivables Finance Limited's letter of 22 April 2026 put the figure at £1,900,000, including a £40,000 termination fee, good for value on 30 April 2026. It is the first of three pieces that solve a common deadlock: the outgoing lender wants its money, the incoming lender wants a clean register. The letter fixes the figure; the payment at Utilisation and the deed of release then change hands in the same moment. Chapter 2

Perfection

The steps after signing that make security good against people outside the deal: a filing, a registration, a notice, or holding the title documents. Creation gives the Bank a right against the Company. Perfection gives it a right the rest of the world must respect. Clause 5 lists the jobs: Companies House within 21 days, HM Land Registry inside the priority period, the deeds and share papers on the day, and notice to the insurer. Debenture §5 · Chapter 5 · Chapter 6

Permitted Security

The one kind of security the Company may give elsewhere without asking. It must pass four limits: the asset was acquired after 24 April 2026; the security goes only to the person who financed it; it secures only the asset's price and finance cost; and the total so secured never exceeds £750,000 at any time. It is the Company's room to buy machines on finance. The door stayed unused. Definition: Permitted Security · Debenture §6.1 · Chapter 7

Preferential creditors

Creditors whose debts Parliament pays out of floating-charge assets ahead of the charge (Insolvency Act 1986, section 175 and Schedule 6). At the time of writing (2026) there are two groups; check the current figures. Employees, for four months' pay before insolvency up to £800 each, plus holiday pay. And HM Revenue & Customs (HMRC), for value added tax (VAT), pay-as-you-earn (PAYE) deductions, employee national insurance and construction-industry deductions. In the ghost enforcement of 31 March 2028 they took £220,000. None of it touches a fixed-charge asset. Chapter 3 · Chapter 9

Prescribed part

A slice of the net floating-charge money, set aside for the unsecured creditors (Insolvency Act 1986, section 176A). Net means what is left after the administrator's expenses and the preferential debts. At the time of writing (2026) it is 50% of the first £10,000 and 20% of the rest, capped at £800,000 for charges created on or after 6 April 2020; check the current figures. The Bank does not share in it for its shortfall. In the ghost it was £489,000 with the Book Debts floating and £89,000 with them fixed. The £400,000 difference is the price of the freely operated account. Chapter 9

Priority

The order in which lenders with security over the same asset are paid out of it. For registered land the register decides. Charges rank in the order they are entered, not by date of creation (Land Registration Act 2002, section 48), which is why the official search matters. For machines, stock and debts there is no ranking register. A deed of priority ends the argument by agreement. Chapter 4 · Chapter 10

Q

Qualifying floating charge

A floating charge over the whole, or substantially the whole, of a company's property. It must state that paragraph 14 of Schedule B1 to the Insolvency Act 1986 applies to it. Its holder may then appoint an administrator out of court. Clause 3.5 says the words. That one sentence is the Bank's fastest route to the assets on the day it matters. Debenture §3.5 · Chapter 3 · Chapter 9

R

Receiver (LPA receiver)

A person the Bank appoints to take particular assets and turn them into money. In the Debenture, a Receiver of any of the Security Assets (clause 10). The power comes from the Law of Property Act 1925, the "LPA": a mortgagee may appoint a receiver once the mortgage money is due (section 101). The Debenture switches off the restrictions in section 103 (clause 9.2). The receiver is the agent of the Company, not of the Bank (section 109; clause 10.3). So the Company answers for what the receiver does, and pays the fees. Definition: Receiver · Debenture §9.2 · Debenture §10 · Chapter 9

Registration at Companies House (forms MR01 and MR04)

A company that creates a charge must deliver a statement of particulars, form MR01, and a certified copy of the instrument to Companies House. The deadline is 21 days beginning with the day after creation (Companies Act 2006, section 859A). The Debenture was created on 24 April 2026, so day 21 was 15 May; the filing went in on 5 May, day 11. Late, and the charge is void against a liquidator, an administrator and any creditor, and the money secured becomes payable at once (section 859H). The court may extend the period, but rarely and on terms (section 859F). Form MR04 is the statement of satisfaction that clears a repaid charge from the register (section 859L). Nothing forces anyone to file it; that is how a charge repaid in November 2024 was still on the Company's file in March 2026. Debenture §5.1 · Chapter 2 · Chapter 6

Release

The lender's act of giving up its security, so the assets belong to the Company free of any claim. It is not automatic. Once the Secured Liabilities are paid in full and the Security Period has ended, the Bank must act at the Company's request and cost (clause 14.1). It releases the assets, reassigns the Insurances, returns the deeds and share papers, and signs what is needed at HM Land Registry (form DS1) and Companies House (form MR04). A payment later undone revives the security (clause 14.2). The Bank may wait to release while that could still happen. Debenture §14.1 · Debenture §14.2 · Chapter 10

Reservation of rights letter

A lender's letter after a breach. It says four things: the lender knows of the Event of Default; it is not waiving it; it is not, today, accelerating or enforcing; and every right stays alive for later. It stops the lender's ordinary conduct, taking interest and lending on, being read as a waiver. The Bank sent one on 24 February 2028, eight days after the certificate showing 3.10:1. Chapter 8

S

Secured Liabilities

All money and liabilities the Company owes the Bank, now or later, under the Facility Agreement or the Debenture, with interest, fees, costs and expenses. Security secures a debt, and this definition says which debt. At 31 March 2028 they stood at £12,000,000: the Term Loan of £9,750,000, £2,000,000 drawn on the Revolving Facility, and £250,000 of interest and costs. Definition: Secured Liabilities · Debenture §2.1 · Chapter 1

Security

A claim on a particular thing, which a lender can turn into money if it is not repaid. It ranks ahead of creditors who hold only a promise. An unsecured lender joins the queue and takes pence in the pound. A secured lender takes the named asset, sells it and is paid from the price first. The Security Assets are every asset the Debenture charges; after clause 3.4, that is everything the Company has. Definition: Security Assets · Chapter 1

Security Period

The time the security lasts. It runs from 24 April 2026 until all the Secured Liabilities have been paid in full and no facility remains available to be drawn. The second half is the trap. A Revolving Facility repaid on Tuesday can be drawn again on Wednesday, so the security holds while the facility is open, even at a nil balance. On 30 April 2031 both ends arrive together. Definition: Security Period · Chapter 10

Security review

A check, on a default, that every piece of the lender's security still exists and what it would fetch. It was one term of the waiver of 10 March 2028, delivered by the Bank's solicitors on 20 March 2028. Its list: fresh searches; the land; the machines and their plates; the share papers; the insurer's acknowledgement; the Book Debts and the account; any Permitted Security against the cap; the age of the floating charge; the guarantee. Chapter 8 · Chapter 10

Shares and the stock transfer form

The Shares are the 100 ordinary shares of £1 in Tooling, all of its issued capital, on share certificate number 3 (Schedule 3). Clause 3.2(c) charges them by fixed charge. A stock transfer form moves shares from one name to another. At Signing the Company delivered the certificate and a form signed with the buyer's name and the date left blank (clause 5.2). On enforcement the Bank can fill in a buyer and sell Tooling whole. Until an Enforcement Event the Company keeps the dividends and the votes (clause 8.4). Definition: Shares · Schedule 3 · Debenture §5.2 · Debenture §8.4 · Chapter 5

Solicitors' undertaking

A promise a solicitor gives in the firm's name to do a specific thing. The profession treats it as binding, and a court can order the firm to perform it or pay. The Bank's solicitors undertook to deliver the MR01 and the certified copy within the 21 days, in the Company's name and at its cost (clause 5.1). If the filing failed, the Bank's claim would lie against a law firm with insurance, not a borrower in trouble. Debenture §5.1 · Chapter 6

U

Unsecured creditor

A creditor holding a promise and nothing else: no claim on any particular asset. On an insolvency it shares what is left after the secured and preferential creditors, pence in the pound. The Company's trade suppliers, owed £1,900,000 in the ghost of 31 March 2028, are its unsecured creditors. The prescribed part is their share. Chapter 1 · Chapter 9

W

Waiver

Giving up a right, by words or by conduct. A lender that carries on as normal after a breach may be told it waived it; that is why a reservation of rights letter comes first. A waiver on terms is a bargain. On 10 March 2028 the Bank waived the Interest Cover breach for the quarter to 31 December 2027, and only that. The price: a fee of £25,000; a margin 0.50% higher until two compliant quarters in a row; a blocked account from 16 March 2028; monthly accounts; a security review. A waiver touches the loan, not the security (clause 15.1). Debenture §15.1 · Chapter 8

Waterfall

The order in which the money from the assets is paid out, each claim filled before the next receives anything. From a fixed-charge asset: the costs of sale, then the Bank, then any surplus to the Company (clause 11.1; Law of Property Act 1925, section 105). From the floating-charge assets three claims come first by law: the administrator's expenses (Schedule B1, paragraph 99), the preferential debts (section 175) and the prescribed part (section 176A). In the ghost of 31 March 2028 the Bank recovered £7,191,000 of £12,000,000 with the Book Debts floating. Had the fixed charge held, £7,591,000. Debenture §11.1 · Chapter 9