(1) If, on the liquidation or bankruptcy of any seller or on the appointment of any person to act as the receiver or manager of the property of any seller that is a company, there are no goods or not enough goods to enable the layby sale to be completed, or if any buyer is or becomes entitled under section 9 to recover any sum of money, then the buyer shall be a creditor in the liquidation, bankruptcy, or receivership to the extent of the payments that he has made to the seller on account of the purchase price of the goods or to the extent of the sum that he is entitled to recover, as the case may require, with priority, subject to subsection (2), over all other unsecured creditors and over creditors secured by the kind of security interest described in subsection (1A).
(1A) The kind of security interest referred to in subsection (1) is a security interest that—
(c) is not a security interest that has been perfected under the Personal Property Securities Act 1999 at the commencement of the liquidation, or at the time of the receiver's appointment, or at the date of adjudication, as the case may be, and that arises from the transfer of an account receivable for which new value is provided by the transferee for the acquisition of that account receivable (whether or not the transfer of the account receivable secures payment or performance of an obligation).
(2) Debts to which priority is given by subsection (1) must be paid in accordance with section 312 and Schedule 7 of the Companies Act 1993, or section 30 of the Receiverships Act 1993, or section 274(3) of the Insolvency Act 2006, as the case may be.
(3) The rights conferred by subsection (1) shall not be available to any buyer of the kind described in paragraph (a) or paragraph (b) of subsection (3) of section 10.
(4) In subsection (1), the terms account receivable, inventory, new value, purchase money security interest, and security interest have the same meanings as in the Personal Property Securities Act 1999.
(5) The provisions of this section, as in force immediately before the commencement of the Personal Property Securities Act 1999, continue to apply in respect of a seller's property that was subject to a floating charge that, before the commencement of that Act, became a fixed or specific charge.
Section 11 heading: amended, on 1 July 1994, pursuant to section 2 of the Company Law Reform (Transitional Provisions) Act 1994 (1994 No 16).
Section 11(1): amended, on 1 May 2002, by section 191(1) of the Personal Property Securities Act 1999 (1999 No 126).
Section 11(1): amended, on 1 July 1994, by section 2 of the Company Law Reform (Transitional Provisions) Act 1994 (1994 No 16).
Section 11(1A): inserted, on 1 May 2002, by section 191(1) of the Personal Property Securities Act 1999 (1999 No 126).
Section 11(1A)(b): amended, on 3 December 2007, by section 445 of the Insolvency Act 2006 (2006 No 55).
Section 11(1A)(c): amended, on 3 December 2007, by section 445 of the Insolvency Act 2006 (2006 No 55).
Section 11(2): replaced, on 3 December 2007, by section 445 of the Insolvency Act 2006 (2006 No 55).
Section 11(4): inserted, on 1 May 2002, by section 191(1) of the Personal Property Securities Act 1999 (1999 No 126).
Section 11(5): inserted, on 1 May 2002, by section 191(1) of the Personal Property Securities Act 1999 (1999 No 126).