The Danish Government has recently proposed a new form of
charge over the assets of businesses. In English terms, the
virksomhedspant would be recognized as a form of a
fixed and floating charge. If introduced, the proposal could
benefit financial institutions and corporations by simplifying
the structure for taking security over assets of businesses.
The vehicle would be a special mortgage deed registered in a
public registry with reference to the assets (or, in a
restricted form, to the portfolio of trade receivables).
Previously, in Denmark, the regime for taking security required
that individual assets be recognized and identified and the
security over them established with reference to those
A report prepared by a special committee appointed in 2003
by the Ministry of Justice made favourable conclusions
regarding the concept and contains a draft Bill. The report,
published on 23 February 2005, is 350 pages long and falls
short of the structure that the financial sector has requested
for larger finance transactions. One negative factor is the
imposition of a registration fee of 1.5% on the value of the
debt secured. Given the current level of interest rates, this
registration fee becomes almost prohibitive. On the
administrative side, the need to keep the beneficiaries on
record at the registry will be cumbersome.
The report will be subject to comments by the public and
many industry specialists will be critical of a number of its
features, which fall well short of the common law model. The
Ministry of Justice expects that a Bill will be presented in
parliament before mid-year.
Steen Halmind and Ian Tokley