30Preferential claims

1. This section applies to a receiver of the property of a grantor that is a company, other than a company in liquidation at the time of the receiver's appointment, and who was appointed under a security agreement that created or provided for a security interest that—

2. is over all or any part of the company's accounts receivable and inventory or all or any part of either of them; and
3. is not a purchase money security interest that has been perfected at the time specified in section 74 of the Personal Property Securities Act 1999; and
4. is not a security interest that has been perfected under the Personal Property Securities Act 1999 at the time of the receiver's appointment and that arises from the transfer of an account receivable for which new value is provided by the transferee for the acquisition of that account receivable (whether or not the transfer of the account receivable secures payment or performance of an obligation); and
5. is not a security interest referred to in subsection (6).

6. A receiver to whom this section applies must apply accounts receivable and inventory that are subject to the security interest or their proceeds—

7. first, to reimburse the receiver for his or her expenses and remuneration; and
8. secondly, to pay the claims of any person who has—
   1. a purchase money security interest over all or any of those assets, that has been perfected at the time specified in section 74 of the Personal Property Securities Act 1999:
   2. a security interest over all or any of those assets, that has been perfected under the Personal Property Securities Act 1999 at the time of the receiver's appointment and that arises from the transfer of an account receivable for which new value is provided by the transferee for the acquisition of that account receivable (whether or not the transfer of the account receivable secures payment or performance of an obligation); and
   3. a security interest referred to in subsection (6) that is over all or any of those assets; and
9. thirdly, to pay preferential claims to the extent and in the order of priority specified in Schedule 7 (except clauses 1(1) and 2(1)(b)) of the Companies Act 1993.

10. The receiver must apply the accounts receivable and inventory as set out in subsection (2) before paying the claims of any person under a security interest, other than a security interest referred to in subsection (2)(b).

11. For the purposes of subsection (2)(a), if an amount of an expense or of remuneration—

12. is payable partly in relation to the accounts receivable or inventory concerned and partly in relation to other property,—
    1. the amount must be fairly and equitably apportioned between the accounts receivable or inventory and the other property; and
    2. the proportion relating to the accounts receivable or inventory must be taken into account; and
    3. the proportion relating to the other property must be disregarded:
13. is payable only in relation to property other than the accounts receivable or inventory concerned, the amount must be disregarded:
14. is not payable in relation to any particular property, only a fair and equitable proportion of the amount must be taken into account.

15. In the application of Schedule 7 of the Companies Act 1993 in accordance with subsection (2),—

16. references to a liquidator are to be read as references to a receiver:
17. references to the commencement of the liquidation are to be read as references to the appointment of the receiver:
18. references to a company being put into or being in liquidation are to be read as references to the company being put into or being in receivership:
19. the reference to a period of 4 months before the commencement of the liquidation in clause 1(2)(a) is to be read as a reference to a period beginning 4 months before the date of appointment of the receiver and ending either—
    1. 14 days after the date of appointment of the receiver; or
    2. if notice of the termination of that employee's employment is lawfully given to the employee within 14 days after the date of appointment of the receiver or by any later date to which the period for giving notice is extended under section 32(3) of the Receiverships Act 1993, on the day on which the contract of employment is terminated:
20. the reference to before, or because of, the commencement of the liquidation in clause 1(2)(b) and (c) is to be read as a reference to before the expiry of 14 days after the date of appointment of the receiver, or because notice of the termination of that employee's employment is lawfully given to the employee within 14 days after the date of appointment of the receiver or by any later date to which the period for giving notice is extended under section 32(3) of the Receiverships Act 1993.

21. Repealed

22. The provisions of this section, as in force immediately before the commencement of the Personal Property Securities Act 1999, continue to apply in respect of a company whose property was subject to a floating charge that, before the commencement of that Act, became a fixed or specific charge.

23. For the purposes of subsections (1)(d) and (2)(b)(iii), the security interest is a security interest over accounts receivable, inventory, or both to the extent that the security interest secures payment or performance of an obligation under or in relation to a qualifying derivative and—

24. the counterparties to the derivative are—
    1. 2 qualifying counterparties; or
    2. a qualifying counterparty and an overseas person; and
25. before enforcement of the security interest, the collateral is transferred or otherwise dealt with so as to be in the possession or under the control of—
    1. the enforcing counterparty; or
    2. another person (who is not the company that granted the security interest) on behalf of the enforcing counterparty, under the terms of an arrangement evidenced in writing.

26. Terms and expressions defined in section 122A of the Banking (Prudential Supervision) Act 1989 and used in subsection (6) have in that subsection the same meanings as in that section.

27. Section 122B of the Banking (Prudential Supervision) Act 1989 applies with all necessary modifications for the purposes of subsection (6)(b) (and those modifications include treating references to section 122(9A)(b) of that Act as references to subsection (6)(b) of this section and treating references to the grantor as references to the company that granted the security interest).