Article

20 August 07

HBOS Group: things every solicitor should know

by James Ness

Implications for solicitors of the HBOS Group reorganisation taking place on 17 September 2007

For those who are not familiar with the terms of the HBOS Group Reorganisation Act 2006 I would urge you to read the formal notice on the subject on p 17 of this issue.

Essentially the Governor & Company of Bank of Scotland, Halifax plc, Capital Bank plc and HBOS Treasury Services plc will operate under a single entity of Bank of Scotland plc with effect from 17 September 2007. There are consequences for both conveyancers and civil court practitioners. Some of these are alluded to in the formal notice; others will be dealt with in specific instructions from the Bank. I would however draw your particular attention to the following:

(1) Carefully consider the terms of instructions received in each case from Bank of Scotland, Halifax plc (and its divisions), Capital Bank plc or HBOS Treasury Services plc in particular to ensure that any security granted refers to the correct lender.

(2) The appointed day is 17 September 2007, and effective from that date, the business and undertakings of Halifax plc, Capital Bank plc and HBOS Treasury Services plc will transfer to the Governor & Company of the Bank of Scotland, which simultaneously will register as a public limited company and be renamed Bank of Scotland plc.

(3) Security instructions in the run-up to the appointed day will include two versions of the security document, to cover the possibility that it is executed either before or after the appointed day. You must ensure that securities, discharges and other deeds are granted in favour of the correct entity as at the date of execution. It may be prudent in settlements very close to the appointed day to have both of these documents executed if you cannot be confident about the date of execution. The surplus document in such cases should be destroyed.

(4) HBOS is in discussions with the Scottish Court Service as to the procedure to be adopted in any existing court proceedings at the appointed day, but the position has not yet been finalised.

James Ness

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