Insolvency: Transactions At An Undervalue

3rd May 2017

Commercial Barrister Morwenna Macro’s updated article on Transactions at an Undervalue in bankruptcy and liquidation was published on the Insight online encyclopaedia on Westlaw on 6 February and is now available to all on PDF here.  It covers the powers that Trustees in Bankruptcy and Liquidators have to challenge transactions that appear to have been made for nil consideration or significantly less than value, have them set aside, and restore the position for the benefit of creditors, pursuant to s.238 Insolvency Act (liquidation) and s.339 Insolvency Act (bankruptcy).  The article also deals with what “the relevant time” is for each insolvency process, the meaning of “transaction”, how to assess the value of consideration, the powers of the court and orders that can be made, and defences, including limitation.  It also covers the provisions dealing with transactions defrauding creditors at s.423 of the Insolvency Act.