The Circumstances in which the Prescribed Part Order applies
The Two Tests
For unsecured creditors to benefit from the "prescribed part" two tests must first be satisfied:
- The insolvency process must commence after the 15th September 2003.
- The intervening bank debenture must have been created after 15th September 2003.
Because of this second test it is likely that for many years to come (while pre 15th September 2003 debentures continue in existence) the "prescribed part" will not apply in many insolvencies.