A charge document
is a Security documents may give the
lender far wider remedies than those in the loan agreement, and the lender may
be free to exercise those rights without regard to the loan agreement.
Bank/
Companies which borrow money on security should not assume that the lender's
rights are restricted to those set out in the loan agreement.
In
fact, the security documents may give the lender far wider remedies than those
in the loan agreement. And, as a recent case shows, the lender may be free to
exercise those rights without regard to the loan agreement.
Borrowers obviously need to check both
loan and charge documentation to ascertain what events of default they're
subject to. Any different rights that the lender has under the loan and the
charge also need to be checked. Given the complexity of much commercial
documentation, this is a matter on which professional advice should be sought.
