COMPANIES ACT 1963 – SECT 98 Preferential payments when receiver is appointed under floating charge.
98.—(1) Where either a receiver is appointed on behalf of the holders of any debentures of a company secured by a floating charge, or possession is taken by or on behalf of those debenture holders of any property comprised in or subject to the charge, then, if the company is not at the time in course of being wound up, the debts which in every winding up are, under the provisions of Part VI relating to preferential payments to be paid in Priority to all other debts, shall be paid out of any assets coming to the hands of the receiver or other person taking Possession as aforesaid in priority to any claim for principal or interest in respect of the debentures.
(2) In the application of the said provisions section 285 of this Act shall be construed as if the provision for payment of accrued holiday remuneration becoming payable on the termination of employment before or by the effect of the winding up order or resolution, were a provision for payment of such remuneration becoming payable on the termination of employment before or by the effect of the appointment of the receiver or possession being taken as aforesaid.
(3) The periods of time mentioned in the said provisions of Part VI shall be reckoned from the date of the appointment of the receiver or of possession being taken as aforesaid, as the case may be.
(4) Where the date referred to in subsection (3) occurred before the operative date, subsections (1) and (3) shall have effect with the substitution for references to the said provisions of Part VI of references to the provisions which, by virtue of subsection (12) of the said section 285 are deemed to remain in force in the case therein mentioned, and subsection (2) of this section shall not apply.
(5) Any payments made under this section shall be recouped so far as may be out of the assets of the company available for payment of general creditors.