Antecedent Transactions and Recovery
When a director finds itself in a situation where a company is in financial trouble, it may take steps to move the company assets out of the reach of creditors before it enters insolvency. This could include the director paying itself or third parties funds or transferring the ownership of some company assets.
A liquidator or an administrator (referred to as the ‘office holder’) has the power to apply to the court to set certain transactions which took place prior to the company’s insolvency. The most common transactions to be set aside are those where an asset was sold at an undervalue or were a creditor was paid in preference to others. These transactions are commonly known as “antecedent transactions”.
If you are a director of a company that you think may be close to insolvency, it is important that you seek the necessary advice before entering into any transactions.
As well as acting for directors and companies, our experienced insolvency team also work with insolvency practitioners tin recovering any misappropriated company property. The benefit of acting for both sides mean that we understand what the opposing party is likely to be thinking and we can always be one step ahead.