Examples of using Super-priority in English and their translations into Arabic
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Super-priority" for acquisition security rights.
The clauses wouldbe accurate only if they were confined to super-priority of a security right in equipment.
Mr. Riffard(France)asked for clarification regarding the types of creditors that would benefit from super-priority.
Mr. Smith(United States of America)expressed opposition to the proposals to extend super-priority to the proceeds of inventory since it would discourage receivables financing.
If recommendation 191 was retained,it should remain in its current form and the seller should enjoy super-priority.
It was widely felt that the super-priority given under recommendation 187 to acquisition security rights in inventory should not be extended to proceeds of inventory in the form of receivables.
The clauses within brackets were intended to remind the reader of themeans whereby an acquisition financier achieved super-priority.
In order to achieve the same result in a retention-of-title system, in which super-priority was based on retained ownership, that ownership had to be converted into an ordinary security right.
In response, it was said that even in a comprehensive security regime, retention of title had a useful role to play andhad a privileged position to the extent that it had super-priority.
Mr. Voulgaris(Greece) said that there could be no super-priority in the case of retention-of-title or financial lease arrangements, since super-priority presupposed full ownership.
In the context of the unitary approach, which treated all secured creditors equally, the objective of conferring such status could be achievedonly by proposing that the lawmaker should accord super-priority to acquisition financiers.
That would parallel the situation with regard to acquisition security rights,i.e. there would be no super-priority vis-à-vis prior lenders in respect of proceeds of inventory that took the form of liquid assets of that kind.
Mr. Kohn(Observer for the Commercial Finance Association) said that one of the virtues of the non-unitary approach section was that it protected all the parties andprovided a simple way for the seller of goods to acquire super-priority.
It could take an assignment of the supplier ' s right in return for paying out the supplier,thereby acquiring super-priority through assignment of the title enjoyed by the retention-of-title seller.
Mr. Cohen(United States of America) said that the note to the Commission was premised on the consideration that, since the acquisition financier already had priority,it would be superfluous for a super-priority rule to apply.
This possibility for declarations is intended to enhance certainty by providing asimple disclosure mechanism for assignees to know which super-priority rights would prevail over their rights without having to investigate the substantive law of the relevant Contracting State.
It was also observed that the economic objective of encouraging supplier credit could be achieved by recognizing that, as long as it was publicized, retention of title could begiven priority as of the day it was established(" super-priority").
However, if the logic of retention of title or leasing was retained, while at the same time provisionwas made for an acquisition security right with super-priority, the non-unitary approach would merely supplement the unitary approach.
The Commission may wish to note that these recommendations provide that the security right in the proceeds of an asset that was subject to a retention-of-title or financial lease right has thepriority of a non-acquisition security right(i.e. not a super-priority).
There would then be two categories of acquisition financiers with preferential status, those who derived that status from their retention of title andthose who had been given super-priority, and it would be necessary to determine how conflicts between them should be settled.
The Commission may wish to consider that,for the same policy reasons receivables are excluded from the super-priority in this recommendation, other proceeds of inventory consisting of rights to payment such as negotiable instruments, funds credited in a bank account and obligations to pay under an independent undertaking, should also be excluded.
If it considered that it should, it must then decide whether the rule should be formulated in the same way or, if those types of proceeds were excluded,whether the recommendation should be reformulated to provide that the super-priority of an acquisition security right should not extend to proceeds of inventory.
In that respect, it was added, difficulties might be encountered whereenforcement of a reorganization plan contemplating such" super-priority" would be sought in courts other than those of the jurisdiction in which the plan was approved, and especially when the change in the ranking of security interests would affect assets held by solvent members of the corporate group.
However, the note presupposed a specialized registry which, by being asset-specific, did not allow pre-registration, although there existed in the world various types of specialized registries of which that was not true, so that the consideration expressed in the notewas true only of a subset of registries, and the super-priority rule might not be superfluous in all cases.
It was said that, in order to ensure the same results in the unitary and the non-unitary approach,that security right should have super-priority in proceeds in the form of equipment but not in proceeds of inventory in the form of the payment rights described in the proposed new recommendation 197.
When obtaining credit or incurring indebtedness is essential to maximizing the value of assets and the credit or finance is not otherwise available as an administrative expense or is to be incurred outside the ordinary course of business, the court may authorize that credit or debt to be incurred as an administrative expense,to be afforded super-priority ahead of other administrative expenses or to be supported by the provision of security on unencumbered or partially encumbered assets.
With respect to recommendation 199(unitary approach), the suggestion was made that,for the same reasons for which the super-priority for security rights in inventory did not extend to receivables, it should not extend to other payment rights, such as negotiable instruments, rights to the payment of funds credited to a bank account and rights to payment under independent undertakings.
When obtaining credit or incurring indebtedness is essential to maximizing the value of assets, and the credit or finance is not otherwise available as an administrative expense or is to be incurred outside the ordinary course of business, the court may authorize that credit or debt to be incurred as an administrative expense,to be afforded super-priority ahead of other administrative expenses or to be supported by the provision of security on unencumbered or partially encumbered assets.
Under the unitary approach, all acquisition financiers andacquisition secured creditors of consumer goods are able to claim a super-priority over non-acquisition secured creditors for their acquisition financing right or acquisition security right without the need to make the right effective against third parties by registration or possession(see A/CN.9/631, recommendation 190, unitary approach).
In cases in which the order of priority of competing rights in the original encumbered asset is not determined by the order of registration(as is the case, for example,with acquisition financing rights that enjoy a super-priority), a separate determination will be necessary for the priority rule that would apply to proceeds see chap. XII, Acquisition financing rights, paras.