Section 207 CAMA 2020

Preferential payment to debenture holders in certain cases

(1) Where a receiver is appointed on behalf of the holders of any debenture of a registered company secured by a floating charge, or possession is taken by, or on behalf of those debenture holders of any property comprising of subject to the charge, then if the company is not at the time in the course of
being wound up, the debts which in every winding-up are under the provisions relating to preferential payments in section 657 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 in priority to any claim for principal or interest in respect of the debentures.

(2) In the application of the provisions relating to preferential payments—
(a) section 657 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 appointment of the receiver or possession being taken ; and

(b) the periods of time mentioned is reckoned from the date of the appointment of the receiver or of possession being taken, as the case may be, and if such date occurred before the commencement of this Act, the provisions relating to preferential payments which would have applied but
for this Act, shall be deemed to remain in full force.

(3) Any payment made under this section shall be recouped as far as may be out of the assets of the company available for payment of general creditors.

(4) Notwithstanding any provision in this Act or any other law to the contrary, the holder of a fixed charge shall have priority over other debts of the company including preferential debts.