NORWAY Law and Practice Contributed by: Ida Marie Windrup, Daniel Jovanovic, Markus Nilssen and Steffen Rogstad, BAHR
rules, which come into play under circumstances such as intentional wrongdoing, fraudulent activity or simi - lar. Objective claw-back may occur within three months from the date when the petition for bankruptcy was filed with the court (whether filed by the debtor or by a creditor). The subjective claw-back period is up to ten years for transactions where the creditor knew or should have known that the debtor was insolvent or that the transaction would favour certain creditors at the expense of others or deprive creditors of assets. 5.6 Release of Typical Forms of Security Security is typically released through a release letter or agreement, with a notice of release delivered to the relevant debtor (including an account bank) or, for a registrable security, a release declaration noted on the original charge form and delivered to the relevant registry. 5.7 Rules Governing the Priority of Competing Security Interests and/or Claims Norwegian law permits multiple security interests over the same assets. Multiple creditors can hold security over the same collateral, with priority determined by registration timing and applicable rules. In general, priority follows the “first in time, first in right” principle. Norwegian law recognises both contractual and struc - tural subordination. Priority can be contractually varied among lenders through intercreditor agreements. Common arrange - ments include: • senior/junior lender structures with agreed pay - ment waterfalls; • turnover provisions requiring junior creditors to pay amounts received to senior creditors; • standstill provisions restricting junior creditor enforcement rights; and • agreement on proceeds distribution from security enforcement. Contractual subordination provisions generally sur - vive the insolvency of a Norwegian borrower, but with important limitations:
• Payment subordination – provisions governing payment priorities between creditor groups are typically respected and enforceable in Norwegian insolvency proceedings. • Turnover obligations – requirements for junior creditors to turn over payments to senior creditors are generally upheld. • Enforcement restrictions – standstill and enforce - ment subordination provisions are usually hon - oured. • Limitations – it is not possible to contract around certain mandatory insolvency rules, and the insol - vency estate administrator may challenge arrange - ments that prejudice other creditors or constitute voidable preferences. Commercially negotiated intercreditor arrangements are generally respected, provided they do not violate mandatory insolvency law provisions or public policy. However, it is advisable to obtain legal advice in Nor - way confirming enforceability in insolvency scenarios for complex subordination structures. 5.8 Priming Liens and/or Claims Several claims can prime a lender’s security interest by operation of Norwegian law: • Insolvency costs – administration costs and fees in bankruptcy or restructuring proceedings rank ahead of secured creditors. • Employee claims – certain employee salary and pension claims have statutory priority (up to specified limits) and rank ahead of general secured creditors. • Tax and social security – some tax claims and social security contributions may have preferential status, although reforms have limited their priority in recent years. • Maritime liens – in shipping transactions, certain maritime claims (crew wages, salvage, port dues) have super-priority over ship mortgages. • Retention of title – suppliers’ valid retention of title claims over goods can prime security interests. • Set-off rights – creditors’ set-off rights may effec - tively reduce amounts available to secured lenders.
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