Analytics. Articles. Comments
Published 03.03.2015 Igor Reutov
In Ukraine loans are commonly secured by mortgage, surety or lien, whereas floating charges are rarely accepted by the providers of credit facilities. Analyzing general tendencies in operating of secured loans it should be observed that sureties almost in all cases strive to avoid performance under collateral agreements. Thus when a creditor triggers the procedure of enforcement of a security he often faces impediments erected by a surety. Generally, sureties undertake to challenge collateral agreements and further to transfer ownership in the assets which are subject to lien to affiliated companies. It is noteworthy that a lien (or a mortgage) usually does not involve transfer of possession to a creditor, thus the latter has no actual control over the assets of a lienee or a mortgagor. Although all types of security interests over real estate and chattels are subject to state registration (the former is registered mandatorily, the latter –voluntarily), such registration can be challenged by the interested parties. In attaining these purposes sureties are ‘assisted’ by the courts which deliver dubious decisions. It should be mentioned that a court decision enters into effect 10 days after its delivery (if not appealed), or immediately after a court of appeal has ruled. Submission of the second appeal does not deprive a court decision of its force. Therefore by the moment the court of cassation overrules a dubious decision the assets which are subject to lien (or mortgage) have been dissipated at most times.