1. Legal Structure

A. Spain - Cesión de Créditos:

• Art. 1526-1536 Código Civil: Assignment of receivables is a deal between creditor/assignor and third party/assignee where former transfers ownership of receivable without debtor's consent. Receivable may be derived from any relation, most common sales contract or delivery of services. [Mariscal Abogados doctrine]
• For event: Ticket receipts clause typically says "All receipts and proceeds from sale of Tickets shall remain property of Ticketmaster, shall be segregated, held in trust". So assignment requires tripartite agreement with ticketing platform.
• Future receivables assignment is valid if identifiable: counterparty + legal relationship + specific contract or group of contracts.

B. India - Factoring Regulation Act, 2011 [Amended 2021]:

• Sec 2(j): Factoring Business = business of acquisition of receivables of assignor by accepting assignment of such receivables or financing, whether by way of making loans or advances or otherwise against security interest over any receivables.
• Sec 2(i): Receivable means debt owed by debtor.
• Event receivable qualifies as trade receivable even if future, if contract exists.
• Assignment must be registered with Central Registry CERSAI, stamp duty under Indian Stamp Act.

C. Key Distinction - Sale vs Security:
If assignment is true sale, assignee owns it and it is bankruptcy remote. If security, it is just charge.

2. Essential Clauses for Event Assignment

1. Identification: "All receivables arising from Event, Venue, Date, from ticketing platform [Ticketmaster/BookMyShow], sponsorship contract dated..."[Name]
2. Notice of Assignment: To account debtor [ticketing company, sponsor] - e.g., Notice dated 25 Jan 2008 to Koutons Retail accepted - to make all payments to assignee.
3. Recourse vs Non-Recourse: If event cancelled, who bears risk? Non-recourse = factor bears.
4. Trust Account: Ticket receipts held in segregated escrow, not commingled.
5. Consideration: Discount to face value - typically 80-90% advance.

3. Case Laws

INDIA - IBC Treatment is Most Important

1. Mudraksh Investfin Pvt. Ltd. v. Brijesh Singh Bhadauriya, RP of RCI Industries and Technologies Ltd., NCLAT New Delhi, Company Appeal (AT) Insolvency No. 1671 of 2023, Decided 05-Jan-24 - LEADING CASE ON EVENT/FACTORING RECEIVABLES

• Facts: Corporate Debtor availed factoring services on TReDS M1 platform. Trade receivables assigned to financiers SBI Global Factors and DBS Bank vide Assignment Agreements dated 23.06.2022 and 08.08.2022, then assigned to Mudraksh. Transaction definition: "all actions including bidding for Factoring Unit, discounting, transfer of Bid amount, assignment of Trade Receivables".
• Held: NCLAT held:

Trade receivables discounted on non-recourse basis and liability arose to Corporate Debtor to pay Financiers, Financiers stepped into shoes of Suppliers. When Section 5(8)(e) specifically covers receivables sold or discounted, discounting cannot be covered by other clause.

• Principle for Event: If you discount event receivables on TReDS on non-recourse, it is Financial Debt under Sec 5(8)(e) IBC. Financer is Financial Creditor, can file Sec 7. Assignment does not convert operational debt to financial, but factoring of trade receivable IS financial.

2. SBI Global Factors Ltd. v. M/s. AKS Electricals & Electronics Pvt. Ltd., NCLAT

• NCLT dismissed Sec 7 petition holding factoring as on recourse basis and exposure on assignor. NCLAT reversed: Even if recourse, under Factoring Regulation Act, assignment is valid. Treated as financial.

3. Minions Ventures Pvt Ltd vs Tdt Copper Limited, NCLAT

• NCLAT clarified distinction: Assignment of operational debts [supplier dues] to third party does not convert them into financial debts, UNLESS transaction is factoring under Factoring Regulation Act. For event receivables - if you are ticketing platform assigning to factor under Act, it becomes financial.[2023]

4. Ritesh Kumar Agarwal v. India Factoring and Finance Solutions Pvt. Ltd., (2023) ibclaw.in 426 NCLAT

• Factoring business must be by registered NBFC-Factor. Assignment to unregistered entity invalid under Sec 5 Factoring Act. For event promoter, must assign to RBI registered factor.

UK / EU - TRUE SALE & VAT & RESTRICTIONS

5. Re George Inglefield Ltd Ch. 1 - English Origin

• Test for true sale vs charge: If assignor retains right to surplus, risk of bad debt, or repurchase, it is not true sale but mortgage. For event assignment, if promoter guarantees ticket sales, court may recharacterize as secured loan, not sale. Critical for bankruptcy remoteness.[1933]

6. Finanzamt Essen-NordOst v GFKL Financial Services AG, ECJ Case C-93/10, 27 Oct 2011

• Facts: Assignment of receivables at discount to face value.
• Held: Provided discount is not calculated by reference to fee notionally payable to assignee for taking economic risk of default, value of discount should NOT be treated as consideration for VAT-able supply of services by assignee to assignor.
• Principle: For event assignment at discount e.g., Rs 1cr ticket receivables assigned for 90 lakhs, 10 lakhs discount is NOT service fee liable to VAT/GST if it reflects risk.

7. Court of Appeal - Barbados Trust Company Ltd v Bank of Zambia EWCA Civ 148 & Recent Pinset Masons Case 2023

• Held: Company did NOT misrepresent to bank that it was not prohibited from disposing of receivables where there was restriction on assignment in underlying contract but other methods of transferring value existed. Restriction on assignment clause in sponsorship contract does NOT necessarily bar receivables financing via trust or sub-participation.[2007]
• Application: If your sponsorship contract says "Sponsorship fee non-assignable", you can still assign beneficial interest via trust - valid.

8. District Court Lodz-Vidzew Poland, VIII C 21/19, 31 July 2019 - Future Receivables + Katowice V AGa 280/18

• Polish courts: Factoring companies identify future receivables by accurately identifying counterparty and legal relationship - specific contract or all receivables from sale of goods/services [global assignment]. Event assignment valid if you identify ticketing counterparty + event contract.
• Also: Debtor cannot set off claim which arose AFTER receipt of notice of assignment against assigned claim under Art. 513 Civil Code. Once BookMyShow receives notice, cannot set off later marketing dues against assigned ticket money.

US - FALSE RECEIVABLES

9. Refinance Corporation v. Northern Lumber Sales, Inc., Civ. No. 22973, 1958

• Plaintiff sued on receivables sold and assigned between June-August 1955 which were false, fictitious and nonexistent - defendant did not sell merchandise. Shows assignee must do due diligence - if event does not happen, receivables are fictitious.

4. Risks Specific to Event Receivables

1. Cancellation Risk: Event may not occur - force majeure clause needed.
2. Trust Risk: Ticketing platform holds money as trustee, but commingles - use escrow per LawInsider Ticket Receipts Clause.
3. Stamp Duty & Registration: In India, assignment of receivables above threshold must be registered at CERSAI within 30 days - else not enforceable against liquidator.
4. GST: If event cancelled, factor may demand refund + GST on discount may arise.

Enforcement Steps for Lender:

1. Execute Assignment Agreement + Notice of Assignment + Acknowledgment from ticketing platform.
2. Register under Factoring Act at CERSAI.
3. Open escrow - "Ticket Settlement Process - remits weekly with itemized statement".
4. If default, factor directly collects from platform under Sec 130 Transfer of Property Act - no need for promoter consent.