Summary
An overview of how special notarial bonds provide security interests in movable property during insolvency proceedings.
Special Notarial Bonds under South African Law
Highlights
Legal Framework and Function
Under the Security by Means of Movable Property Act 57 of 1993, a special notarial bond allows a creditor to hold a registered security interest in specific movable assets while they remain in the debtor's possession.
Creditor Priority in Insolvency
In the event of insolvency, such as the case with People's Bank and Richard's business, the bondholder maintains a privileged claim to the proceeds of those specific assets, placing them ahead of other creditors.