Asset Covered Securities Act, 2001
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Rights of preferred creditors in relation to cover assets. |
83.—(1) If a designated credit institution, or its parent entity or any company related to the institution, becomes subject to an insolvency process, preferred creditors are, for the purpose of satisfying their claims and rights under this Part, entitled to have recourse to the cover assets that are included in the relevant cover assets pool ahead of members of, and contributories to, the institution and all other creditors of the institution, parent entity or company. This section applies irrespective of whether the claims of creditors other than preferred creditors are preferred under any other enactment or any rule of law and whether those claims are secured or unsecured. | |
(2) Subject to subsection (3), the claims of preferred creditors of a designated or formerly designated credit institution rank equally among themselves but if those claims cannot be fully satisfied they are to abate in proportion to the amounts of those claims. | ||
(3) The claims of super-preferred creditors rank ahead of those of any other preferred creditors and equally among themselves, but if the first-mentioned claims cannot be fully satisfied, they are to abate in proportion to the amounts of those claims. | ||
(4) Subject to section 87 , subsections (2) and (3) have effect irrespective of— | ||
(a) when the security, contract or appointment giving rise to a claim was issued or made, and | ||
(b) when a claim of a preferred creditor arose, | ||
and irrespective of the terms of that security, contract or appointment. | ||
(5) If the claims of all preferred creditors are not fully satisfied from the proceeds realised from the disposal of cover assets that are included in the relevant cover assets pool of a designated or formerly designated credit institution, those creditors are, with respect to the unsatisfied parts of their claims, to be regarded as unsecured creditors whose claims, subject to subsection (3), rank equally among themselves in any insolvency process relating to the institution. |