VOIDABLE TRANSACTIONS
ANTECEDENT Preference (s239) Transaction at an undervalue Avoidance of a floating charge
TRANSACTIONS (s238) (s245)
PAGE 295 RG
Who can apply? (2) Officeholder can apply to (2) Officeholder may apply to Do not need an application, they
the court for an order the court for an order are automatically invalid if the
(administrator or liquidator.) (administrator or liquidator.) criteria are applicable.
In practise officeholder writes to
floating charge holder stating he
believes it is invalid.
Then the holder will seek to
enforce the charge and force
liquidator into injunctive
proceedings or seek declaration
from court that it is valid.
Definition Where one person is (4) it is a gift or transaction (2)
preferred by the company where company received A floating charge on the
int hat is has been paid consideration significantly undertaking or property created
ahead of other creditors or lower in value than it provided. at a relevant time is invalid...
been put in a better position. except to the extent of:
Re MC Bacon Ltd: considered if • aggregate of
(4) (a) they must be the granting security is a • Same time as of after
company’s creditor, surety transaction at an undervalue. creation of charge
or guarantor or there can be - Decided granting If fall in the exceptions then you
no preference security does not have a valid floating charge.
(b) They must have been put change a company’s
in a better position than they assets and so cannot
were in before the event reduce value. So, it is It seeks in invalidate charges
(c) AND the company must deemed unlikely. which have been created for no
have desired to prefer them. consideration.
Relevant time CONNECTED person then 12 Must occur in the relevant If it was given to a CONNECTED
before insolvency months. time. person then time period is 2 years
It is 2 years ending with onset ending with onset of insolvency
UNCONNECTED person then of insolvency (s240(1)(a)) (5)
6 months Onset depends on the
procedure involved: UNCONNECTED person then
- CL date of presentation relevant time is 12 months.
of petition
- CVL it is date it formally
enters into liquidation.
- Administration it is the
date when the
company files Notice of
Intention to Appoint
Administrator or date it
goes into
administration.
ANTECEDENT Preference (s239) Transaction at an undervalue Avoidance of a floating charge
TRANSACTIONS (s238) (s245)
PAGE 295 RG
Who can apply? (2) Officeholder can apply to (2) Officeholder may apply to Do not need an application, they
the court for an order the court for an order are automatically invalid if the
(administrator or liquidator.) (administrator or liquidator.) criteria are applicable.
In practise officeholder writes to
floating charge holder stating he
believes it is invalid.
Then the holder will seek to
enforce the charge and force
liquidator into injunctive
proceedings or seek declaration
from court that it is valid.
Definition Where one person is (4) it is a gift or transaction (2)
preferred by the company where company received A floating charge on the
int hat is has been paid consideration significantly undertaking or property created
ahead of other creditors or lower in value than it provided. at a relevant time is invalid...
been put in a better position. except to the extent of:
Re MC Bacon Ltd: considered if • aggregate of
(4) (a) they must be the granting security is a • Same time as of after
company’s creditor, surety transaction at an undervalue. creation of charge
or guarantor or there can be - Decided granting If fall in the exceptions then you
no preference security does not have a valid floating charge.
(b) They must have been put change a company’s
in a better position than they assets and so cannot
were in before the event reduce value. So, it is It seeks in invalidate charges
(c) AND the company must deemed unlikely. which have been created for no
have desired to prefer them. consideration.
Relevant time CONNECTED person then 12 Must occur in the relevant If it was given to a CONNECTED
before insolvency months. time. person then time period is 2 years
It is 2 years ending with onset ending with onset of insolvency
UNCONNECTED person then of insolvency (s240(1)(a)) (5)
6 months Onset depends on the
procedure involved: UNCONNECTED person then
- CL date of presentation relevant time is 12 months.
of petition
- CVL it is date it formally
enters into liquidation.
- Administration it is the
date when the
company files Notice of
Intention to Appoint
Administrator or date it
goes into
administration.
