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Rules for Loan creditors:
Loan creditors and landlords are subject to special rules in certain circumstances:(a) if a person (usually a bank) lends money to the company to enable it to pay wages which, if unpaid, would be preferential debts, he himself becomes a preferential creditor in respect of that part of his loan which is used to pay preferential wage debts;(b) a landlord's remedy if rent is unpaid is to seize and sell the tenant's goods on the premises (called "levying distress"). If he does not within six months before compulsory liquidation commences he must give up the proceeds if the liquidator requires them for payment of preferential debts. The rule does not apply in a voluntary liquidation: CA, s.311(7).
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