verpande

Verpande is a Dutch term used to describe assets that have been pledged as security for the performance of an obligation, most commonly a loan. The act of establishing a pledge is verpanding, and the asset that serves as security is referred to as a verpande goed. The pledgor may retain ownership or possession in many cases, while the creditor obtains a security interest (pandrecht) in the asset. If the debtor defaults, the creditor may rely on that security interest to recover the outstanding amount, subject to applicable procedures and any terms in the pledge agreement.

Scope: Verpanding covers movable property (roerende zaken) such as equipment, inventories, ships, or shares, and may also extend to certain rights such as receivables (vorderingen). In Dutch law, the security on movable assets is known as pandrecht; real estate is secured differently through hypotheek (mortgage). A pledge can be created by contract and, depending on the asset, by delivery or registration to perfect the security.

Enforcement and priorities: Upon debtor default, the pledgee can enforce the pledge by realising the asset, typically through sale, subject to statutory rules and the contract. Proceeds are applied to satisfy the debt, with any surplus returned to the pledgor. When multiple security interests exist, priority is determined by the order of registration or agreement, as governed by law.

Usage and context: Verpanding is widely used in corporate finance, leasing, factoring, and secured lending, allowing lenders to mitigate risk while keeping the pledged asset in use by the debtor in many cases. Related terms include pandrecht (the security right in movable property) and hypotheek (mortgage) for real property.