The main exception of the priority rule is the personal interest of monetary security (PMSI), in which a supplier of goods or equipment pays a guarantee on goods delivered (but not yet paid). For example, a lease from a refrigerator or a loan from a financial company secured by a motor vehicle (a serial number with the number number well). A PMSI creditor is a “super” priority for the recovery of its unpaid assets and/or equipment. Intellectual property. Canadian federal laws govern trademarks, patents and certain other forms of intellectual property. Many of these laws are unclear, so a safe party is required to register GSA security on such assets nationally, in addition to enrollment in the PPR. The parties should have legal advice on this issue. A GSA is an effective and effective way to secure personal real estate assets to secure business obligations. However, legal requirements and evidence are often complex and varied. Some of the pitfalls are not obvious. Safe parties may have a poor sense of security when they have an executed GSA in hand.
Strong legal aid, with increasingly specialized experience in this field, can help an assured party avoid some less obvious pitfalls that this deceptively complex area entails, and the potentially considerable costs of falling into one. The trap? Sometimes the provisions of the GSA do not comply with the letter of commitment or the loan agreement. This can lead to insecurity and litigation. The hose? Real estate. An insured party might consider the debtor`s “property” to include his or her property. The trap? In the Atlantic provinces, an ASG cannot protect real estate interests. The hose? Real estate, land shares, rents and leases must be guaranteed by real estate security such as mortgages, bonds, rentals or rentals, not by a GSA. The first person registered in the PPSR usually has priority in the event of insolvency – except in cases of subordination between secured parties that change priorities or if the guarantee is not valid. Due Diligence and Corporate Action. Counsel for the debtor should issue an opinion stating that he has implemented all necessary legal due diligence and the debtor has taken appropriate business steps to approve the GSA.
This includes a review by counsel of all relevant GSA laws, such as . B corporate financial support laws that prohibit a debtor from providing such a guarantee, unless he meets some complex financial tests. The trap? Regardless of the person or type of organization that provides the GSA, a court may prohibit GSA guarantees if the debtor`s name is incorrect. It is therefore essential to ensure that the name of the debtor executing the GSA is legally correct and that the corresponding registration complies with the rules of the applicable Personal Wealth Security Act (PPSA). The advice to avoid this trap: Registration on the PPSR is an important step and “perfects” the safety interest. The perfection of the safety interest and the timing of this perfection determines the order of priority of the insured parties who have an interest in the assets of the company. The insured party must register a security notice of interest created by an ASS by filing a funding statement in the Provincial Personnel Property Registry (RPP) and possibly under the U.S. Uniform Trade Code or elsewhere, depending on the nature of the assets charged. The insured party may be required to make several registrations in different provinces, depending on the type of assets guaranteed, where they are located and the jurisdictions in which the debtor operates. Depending on the circumstances, a GSA that insures rents must be registered in the PPR land registry, in addition to registering the corresponding rent assignment.