NEW ZEALAND Law and Practice Contributed by: David Weavers, Alex MacDuff, Matt Consedine and Verniel Virtucio, Russell McVeagh
5.6 Release of Typical Forms of Security Real Property A mortgage over real property can be released by the secured creditor signing a one-page instruction form authorising legal counsel to effect a release of the mortgage via the LINZ online platform. Legal counsel will then effect the release on the platform. Personal Property Security over personal property is released by the secured creditor signing a short release deed (two-to-three pages). The secured creditor usu - ally arranges for any related PPSR registrations to be discharged within a few days after the release is effective. 5.7 Rules Governing the Priority of Competing Security Interests and/or Claims New Zealand recognises that multiple security interests may be granted in the same asset. With respect to real property, the priority of secu - rity interests will generally be determined by the order of registration on the title. With respect to personal property, the rules for priority of competing security interests and claims are set out in the PPSA. The general rules provide that: • a perfected security interest has priority over an unperfected security interest in the same collateral; • if competing security interests are all per - fected, then priority will usually be given to the secured party that was the first to either register a financing statement or take posses - sion of the collateral.
finance context where members of the target group guarantee or secure the acquisition debt. The simplest – and least onerous – procedure under which financial assistance may be given is pursuant to Section 107 of the Companies Act. The only two requirements are that: • all “entitled persons” of the company (usually this means all shareholders) must agree in writing to the financial assistance being given; and • the board of the company resolves that it is satisfied, on reasonable grounds, that the company will, immediately after the giving of the financial assistance, satisfy the solvency test, namely that: (a) it is able to pay its debts as they become due in the normal course of business; and (b) the value of its assets (excluding amounts of financial assistance given by the com - pany in the form of loans) is greater than the value of its liabilities, including contin - gent liabilities. This method is used for wholly owned com - panies, and is very straightforward and quick to implement. Other methods are available to approve financial assistance if the Section 107 test is not available, but they are not typically required in an acquisition finance context. 5.5 Other Restrictions See 7.6 Transactions Voidable Upon Insolven- cy . A secured financier’s security may also be sub - ject to any prior ranking security interests – see 5.7 Rules Governing the Priority of Competing Security Interests and/or Claims .
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