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22 Mar 2023

Valuing appropriated financial collateral in a "commercially reasonable manner" – what ABT Auto Investments v Aapico tells us

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Appropriation is a useful self-help remedy available under the Financial Collateral Arrangements (No. 2) Regulations 2003 to lenders who benefit from security over qualifying financial collateral arrangements. Appropriation enables the collateral-taker to appropriate (or take as its own) the financial collateral, without the need for a court order if the security document provides for a power of appropriation and if the collateral-taker values the financial collateral "in accordance with the terms of the arrangement and in any event in a commercially reasonable manner". 

In this Article, Adam Hardy, Charlotte Drake and James Linforth examine the case of ABT Auto Investments Ltd v Aapico Investment Pte Ltd and others. This is the first case to look at the meaning of "commercially reasonable manner" in this context and provides some much-welcomed guidance on what a valuation made in a "commercially reasonable manner" might look like in practice.

Click here to read more.

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James Linforth

James Linforth
Partner

T:  +44 20 7809 2060 M:  Email James | Vcard Office:  London

Charlotte Drake

Charlotte Drake
Of counsel

T:  +44 20 7809 2583 M:  Email Charlotte | Vcard Office:  London

Adam Hardy

Adam Hardy
Associate

T:  +44 20 7801 4173 M:  +44 7881 035 434 Email Adam | Vcard Office:  London

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