Section 468 | Debts with same rights where unrelated parties hold more than 50%

(1)This section applies if—

(a)a person (“D”) is party to a loan relationship as debtor in a period of account of a worldwide group of which it is a member,

(b)a person (“C”) who is party to the loan relationship as creditor is a related party of D at any time in that period,

(c)there are persons (“the relevant creditors”) other than C who are parties to the loan relationship, or are parties to other loan relationships entered into at the same time, as creditors but who are not related parties of D at any time in that period,

(d)at all times in that period the rights of the relevant creditors are rights in relation to at least 50% of the total amount of the money debt or debts in question, and

(e)at all times in that period C and the relevant creditors have the same rights in relation to the money debt or debts in question.

(2)D and C are treated for the purposes of this Part as if, in relation to the loan relationship concerned (and anything done under or for the purposes of it), they were not related parties of each other at any time in that period.

(3)Persons are not to be regarded as having the same rights in relation to a money debt or debts at any time if—

(a)the terms or conditions on which any of the money is lent and which are in force at that time make different provision in relation to different persons or have, or are capable of having, a different effect in relation to different persons (whether at that or any subsequent time),

(b)arrangements are in place at that time the effect of which is that, at that or any subsequent time, the rights of some persons in relation to any of the debts differ, or will or may differ, from the rights of others in relation to any of the debts, or

(c)any other circumstances exist at that time as a result of which the rights of some persons in relation to any of the debts cannot reasonably be regarded as being, in substance, the same rights as others in relation any of the debts at that or any subsequent time.

(4)For the purposes of this section—

“arrangements” include any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable),

“different persons” includes persons of a different class or description, and

“rights” includes powers.