The company provided cloud-based computer services, mostly to Government departments. The services included the addresses.
The security purported to create a fixed charge over 'all licenses, consents and authorisations (statutory or otherwise) held or required in connection with the Company's business'. There was no express reference to the addresses in the security.
The company went into liquidation, with special managers appointed, and the OR sold the addresses, with the consent of the charge holder.
The OR then applied for directions from the Court as to whether the secured creditor had been granted fixed or floating charge security over the addresses in respect of distributing the sale proceeds.
Whilst the Deputy ICCJ found that the addresses did fall within the charging clause, were not part of the company’s “circulating capital” and were an asset over which fixed charge security could be granted, he found that the security was floating, rather than fixed, charge, based on the drafting and intention of the parties.
The Deputy ICCJ reviewed the authorities, including the decision in Re Avanti last year, establishing the requirement for control over the addresses, and found that, whilst the security provided for such control, the secured creditor did not, in fact, on the evidence, assert such control.
This case again demonstrates the importance of a secured creditor providing evidence of control in support of fixed charge security over an asset, above and beyond a simple contractual obligation to control and the difficulty in creating fixed charge security over IP assets.
In the matter of UKCloud Limited (in liquidation) [2024] EWHC 1259 (Ch)
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