Cession of book debts

Franke south africa pty ltd cession of book debts page 4 of 6 version 1. In our view, it is clear that business rescue practitioners may not lawfully suspend a cession of book debts or for that matter any security right which a bank may enjoy. A session on cessions of debtors in business rescue. Cliffe dekker hofmeyr the nature of cession in security. A cession of book debts confers rights on the bank more generally on the cessionary without a corresponding obligation on the part of the cedent. Factoring and cession of debtors explained inoxico. The portions of the obligations in an insurance companys policy portfolio that are transferred to a reinsurer. When a company cedes book debt, they are effectively giving some creditor the rights to. The term debt assignment refers to a transfer of debt, and all the associated rights and obligations, from a creditor to a third party. A transfer of debt, and all the rights and obligations associated with it, from a creditor to a third party. Debt assignment may occur with both individual debts and business. The only time a pledge construction will be upheld is when the possibility of an outandout security. By concluding this cession of book debts, the borrower agrees to transfer to the lender, its rights, title and.

Risk can be transferred to the reinsurer in one of two ways. The cession can be constructed as an outandout cession or as a cession in security. A cession is the act by which a personentity known as the cedent transfers their personal right to another known as the cessionary. This cession of book debts agreement may be used where a debt is owed or may in the future be owed by a debtor, and additional security is required. In a cession in security, the cedent transfers its right of action to a debt owed to it, known as the principal debt, to the cessionary as security for the debt owed. A session on cessions of debtors in business rescue lexology. Book debt represents payments due the company by customers typically in the form of accounts receivable.

Cession of book debts loan security agreements online. Cession is a bilateral juristic act whereby the cedent transfers its rights to the cessionary. Usually a cession of book debts takes place in terms of an outandout security cession. The factoring of books debts irrespective of whether such is with or without recourse and the discounting of book debts and. By signing a cession of book debts contract, the debtor agrees to transfer to the creditor the right to claim money that is owed to the debtor by the debtors debtors. Note that the cession of book debts can be used to cover debts that already exist and debts that may arise in future. The assignment is a legal transfer to the other party, who. A cession of book debts is a security undertaking that is generally utilised where one entity for example a bank the lender lends and advances money the loan to another entity the borrower, or which may in future lend and advance money to such borrower.

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