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Is partial crystallisation of a floating charge possible?

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Published by a ÑÇÖÞÉ«ÇéÍø Banking & Finance expert
Published on: 12 May 2016
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Crystallisation of floating charges

A floating charge may Crystallize by operation of law or it may Crystallize in accordance with a contract. Crystallisation by contract can by divided into those events that entitle the lender to give notice of crystallisation and those that result in the floating charge being crystallised automatically.

For more information on how floating charges may crystallise, see Practice Note: Crystallization of floating charges.

Most debentures will clearly set out which events will trigger crystallisation by notice and which will trigger the automatic crystallisation provisions. For more information, see Crystallisation of floating charges — Crystallisation by contract.

Effect of Crystallisation

Once a floating charge has crystallised, the key impact is that the chargor can no longer deal with the floating charge assets without the chargee's consent. In practice this will make it difficult for the chargor to run its business. From the chargee's

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Crystallisation definition
What does Crystallisation mean?

Refers to commencement of pension benefit payments from all or part of a pension scheme, as income and/or lump sum. Crystallising defined contribution benefits can trigger the money purchase annual allowance.

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