What are Featherweight Securities? Managing Administration Risk for Lenders
Financiers taking security from a company that does not capture the whole (or substantially the whole) of that company’s assets should consider taking a featherweight security.
A featherweight security should be drafted to ensure that the company is not restricted from dealing with its assets, other than where an administrator is appointed, and the amount secured by the featherweight security should be limited to a nominal amount.
The featherweight security interest must be appropriately registered on the Personal Properties Security Register (PPSR) on time.