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Marshalling — a remedy for the 21st century?

By Charlotte Drake

Marshalling cases are rare these days. Therefore, it is notable that two separate cases were heard in the appeal courts in 2013: Szepietowski v The National Crime Agency (formerly the Serious Organised Crime Agency) and Highbury Pension Fund Management Company and another v Zirfin Investments Management Ltd and others. This article explains why marshalling might affect a secured creditor’s position and the significance of these recent cases.

Marshalling is an equitable principle that aims to prevent one secured creditor arbitrarily depriving another secured creditor of his only security. Traditionally, it applies where the same debtor owes debts to two secured creditors.

It is easiest to show how marshalling works with an example…

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