Continued from page 8


identify problems arising not only within their own client portfolios and the key customers of those clients but also in identifying opportunities to write new business. To this end we have invested a great deal of time and


expertise in developing our own product called Tracker. This first class interactive product gives a detailed picture of the financial risk across your client portfolio and supplier base. It monitors an extensive range of real-time trusted data sources, providing a regular and intuitive report that can be cleansed against your own data and gives you simple red- amber-green alerts. Tracker therefore helps you to resolve looming financial threats before they develop into serious problems and also allows you to complete credit checks accordingly. Originally developed for internal use and to assist our clients, several major lenders are now using Tracker to monitor trends within their client portfolios. At modest cost, we are now making the system available to clients directly and to accountants, solicitors and other friends we currently work with or would like to begin working with. To learn more about Tracker please e-mail sales@ tracker-online.com.


Carl Jackson, Head of Turnaround and Recovery, tel: +44 (0) 7800 617224, e-mail: carl.jackson@rsmtenon.com Continued from page 6 What was wrong with NatWest’s debenture?


The debenture in this case required the proceeds of book debts to be paid into the bank account but placed no restriction on the use that could be made of the balance on the account thereafter. It did not matter whether the account was overdrawn or not. In practical terms this meant although the charge was expressed as a fi xed charge, it did not prevent Spectrum Plus from drawing on the account. The account was an ordinary account on which Spectrum could draw for normal business purposes.


So what did the Supreme Court say?


Put bluntly, Spectrum Plus’s freedom to draw on the account was inconsistent with the charge being a fi xed charge. They said that the essential characteristic


of a fl oating charge which distinguished it from a fi xed charge was that the asset subject


10 June 2011


Learn more about RSM Tenon


RSM Tenon is one of the most progressive and entrepreneurial mid tier professional services firms in the UK. Through a comprehensive suite of accounting and consultancy services, we offer intelligent solutions to a national client base that ranges from individuals and entrepreneurially-led owner managed businesses, to large corporations and public sector organisations. With leadership in the provision of business advisory, risk management, tax, financial management and turnaround and recovery services we are the UK’s seventh largest accounting firm with a fee income of £250m, employing over 3,000 people with offices in all major commercial centre’s across the UK. Within our service portfolio we have a dedicated and experienced business finance team which has close working relationships with an extensive range of funding providers to ensure our clients source the best finance facilities available. Read page 28 to learn more. The specialist services offered by RSM Tenon are regularly used by accountants across the country. Services such as the tax investigations, VAT, corporate finance, fraud investigations, software solutions and turnaround and recovery are all used to provide clients with further services. RSM Tenon offer a flexible, transparent approach which ensures the integrity of your client relationship remains intact and the integrity of your client relationship is maintained. To learn more contact your local office on 0845 223 20 10 or visiting www.rsmtenon.com


to the charge was not fi nally appropriated as a security for the payment of the debt until the occurrence of some future event and in the meantime the chargor was left free to use the charged asset and to remove it from the security. This was the test set out in Brumark. Where the chargor remained free to remove the charged assets from the security, the charge should, in principle, be categorised as a fl oating charge. It was not possible to create a charge on book debts which was fi xed while they were uncollected but fl oating in respect of the proceeds when collected.


But is seems like a sensible


decision? Logical certainly.


It was however a decision with dramatic consequences for businesses and their lenders. You see, the decision doesn’t just affect book debts but all sorts of other assets the business owns, which form changing pools of assets that are used in the day-to-day


Business Money – RSM Tenon


running of the business, such as stock and sums in a bank account.


So what have lenders done about this?


Banks have, of course, adopted new terms and procedures but there is only so much that can be done to shore up their security without making the business unworkable. The consequence of the decision was that at a stroke the Supreme Court cut the value as security of a signifi cant part of any business’s assets. Put bluntly, as a matter of common sense, with less security available for their loans, lenders have had to lend businesses less.


Only the government changing the law can solve the problem now.


Professor Mark Watson-Gandy, barrister, The Chambers of John McDonnell QC,


tel: +44 (0) 20 7831 4445, e-mail: mwg@13oldsquare.com


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