Discussing Insolvency
Discussing Insolvency
DISCUSSING INSOLVENCY
The Banking and Financial Services Act No 7 of 2017 with its amendments
(Act No. 7 of 2020) also contain provisions relating to the insolvency of
Banks in Zamia.
Powers of liquidator
Priority of creditors
Section 132 (1) Despite Banking and Financial Services Act, or any other
written law, in any compulsory winding-up or dissolution of a financial
service provider, the following shall be paid in priority to all other debts in
the order set:
(a) expenses incurred in the process of compulsory winding-up or
dissolution;
(b) depositors whose deposit claims—
(i) are covered by a deposit protection scheme; and
(ii) not covered by a deposit protection scheme;
(c) taxes and rates dues;
(d) wages and salaries of employees of the financial service provider,
excluding executive employees, senior management and other categories
of staff that the Bank may determine, for a period of three months;
(e) charges and assessments due to the Bank; or
(f) other claims against the financial service provider in an order of priority
that the Court may determine on application by the Bank.
Fixed Charge: A fixed charge is created over specific assets of the debtor,
which are identified and delineated at the time the charge is created.
These assets are usually tangible, such as property, machinery, or
equipment. By creating a fixed charge, the debtor's ability to deal with or
dispose of the charged assets is restricted without the consent of the
charge holder (creditor). In the event of insolvency, the assets subject to a
fixed charge are ring-fenced and must be used to satisfy the debt owed to
the charge holder before any other claims are considered.
These case law examples highlight the legal principles surrounding floating
and fixed charges, including their definition, nature, validity, and
enforceability. It is important to consult relevant case law and seek legal
advice for a comprehensive understanding of the specific jurisdiction's
approach to floating and fixed charges.
Mortgages