(d) Secured creditor means a creditor that has a security right.

It may be that, as between the grantor and the secured creditor, the secured creditor has agreed to treat the proceeds as encumbered assets.

Rights and obligations of the grantor and the secured creditor

If the secured creditor and the depositary institution are the same person, the law should provide that the secured creditor automatically has control upon the creation of the security right.

Under the third method of obtaining control, as between the issuer guarantor or nominated person paying the proceeds and the secured creditor, the secured creditor is the beneficiary of the independent undertaking.

Since, at the time of eventual distribution, the extent to which the secured creditor will receive priority will be limited by the value of the encumbered asset, that depreciation can prejudice the secured creditor.

(b) Provide a temporal event for ordering priority among secured creditors and between a secured creditor and other classes of competing claimants.

(ii) Possessory security right means a security right in tangibles that are in the actual possession of the secured creditor or of another person (other than the debtor or other grantor) holding the asset for the secured creditor.

(jj) Non possessory security right means a security right in (i) tangibles that are not in the actual possession of the secured creditor or another person holding the tangibles for the benefit of the secured creditor, or (ii) intangibles.

(a) The names (or other reliable identifiers) of the grantor and the secured creditor, and their addresses

That was said to enhance certainty for the secured creditor with respect to the law applicable to the most important matter for which the security right was created, i.e. the protection of the secured creditor in the case of default.

The law should also permit discharge of a registration by agreement of the secured creditor and the grantor.

It only gives the secured creditor control for purposes of the effectiveness of its rights against third parties.

If the value exceeds the claim, the secured creditor will not be harmed by the diminution of value until that value becomes insufficient to pay the secured claim.

During the proceedings, the secured creditor could also receive the contractual rate of interest on the secured portion of the claim to compensate for delay imposed by the proceedings.

If the secured creditor is the depositary bank, the depositary bank's security right has priority over any other security right.

The debtor may or may not be the person that grants the security right to a secured creditor (see grantor).

The law should provide that the delivery of possession of the assets to be encumbered is to the secured creditor or a third person (other than the grantor or an agent or employee of the grantor) that holds the assets on behalf of the secured creditor.

However a secured creditor may take possession of tangible encumbered assets without the consent of the person in possession of them only in accordance with the law of the State in which those assets are located at the time the secured creditor takes possession of them.

The law should provide that the security agreement must, at a minimum, identify the secured creditor and the grantor, and reasonably describe the secured obligation and the assets to be encumbered.

(i) Another secured creditor with a security right in the same encumbered asset (whether as an original encumbered asset or proceeds)

Another concern is the potential ability of a secured creditor to exercise influence over a business, to the extent that the creditor may seize, or threaten seizure of, the encumbered assets of that business upon default.

The law should provide that a security right in a negotiable instrument that has been made effective against third parties by a method other than possession of the instrument by the secured creditor is subordinate to the rights of a buyer, another secured creditor or other transferee in a consensual transaction who either

It should be noted that insolvency laws providing for consolidation do not affect the rights of secured creditors, other than possibly the holders of intra group securities (where the secured creditor is a group company).

Any such agreement does not affect the relationship between the issuer guarantor or nominated person paying the proceeds and the beneficiary (the secured creditor).

If the value of the product or mass is lower than the value of the goods, the secured creditors share the loss proportionately (e.g. if the value of the cake is 8, each secured creditor gets 4).

This amount remains fixed throughout the proceedings and, upon distribution following liquidation, the secured creditor receives a first priority claim to the extent of that amount.

(a) Extends to all monetary and non monetary obligations owed to the secured creditor up to a maximum monetary amount set forth in the registered notice , including principal, costs, interest and fees, to the extent secured by the security right and

(c) Transfer of control to the secured creditor if the encumbered assets are certain intangible obligations, other than receivables, owing to the grantor by a third person a bank account

The key to the effectiveness of secured credit is that it allows businesses to use the value inherent in their assets as a means of reducing risk for the creditor.

One approach is for the valuation, at least in the first instance, to be determined through agreement by the parties (being the debtor, or insolvency representative, and the secured creditor).

Why not creditor rights?

The insolvency law should specify that, upon application to the court, a secured creditor should be entitled to protection of the value of the asset in which it has a security interest.

Breach secured.

Possession by a third person constitutes sufficient dispossession only if the third person is not an agent or employee of the grantor and holds possession for or on behalf of the secured creditor.

(50) The insolvency law should specify that, upon application to the court, a secured creditor should be entitled to protection of the value of the assets in which it has a security interest.

The Working Group agreed with the substance of paragraph 87, providing for extra judicial enforcement by the secured creditor in control of the bank account with limited and clearly prescribed exceptions (including insolvency).

(c) Secured obligation means the obligation secured by a security right.

on Secured Transactions

But China is a net creditor.

(a) Enable a potential secured creditor to determine, in an efficient manner and with a high degree of certainty prior to extending credit, the priority that the security rights would have over competing claimants and

The law should provide that the right of a buyer of goods is subject to a security right that has become effective against third parties before the sale, unless the secured creditor authorized the sale.

(f) Grantor means a person that creates a security right in one or more of its assets in favour of a secured creditor to secure either its own obligation or that of another person (see debtor).

The Working Group requested the Secretariat to further explain in the commentary the method of control as an alternative to registration, in particular when obtained by a transfer of the bank account to the secured creditor.

Valuation of secured claims