Enforcing Share Mortgages In The “New Old Fashioned Way”

Because of levels of economic turmoil not seen for nearly a

century, some secured creditors have been taking a slightly fresh

approach in relation to realisation of their security in the event

of a default. One of the common features of secured financing

concerning offshore vehicles involves taking a share mortgage over

the shares issued by the offshore entity, which allows the secured

party to take indirect control of any assets held by the entity. In

normal times, the usual way to enforce such security would be to

appoint a receiver who would vote the shares and put a new board of

directors in who would then monetise the underlying assets and

utilise them to pay the secured...