Fraudulent preference - liquidator, Business Law and Ethics

Fraudulent preference - liquidator:

When a transaction is void as a fraudulent preference any charge created is void and any cash paid or property transferred by the company must be returned to the liquidator.  There can be complications when a third party, usually a creditor, has given security (eg. deposit with the lender of the title deeds of the director's house) as security for the company's debt.  The purpose of the fraudulent preference (as in the Kushler Case above) is often to release a third party from his involvement in the company's debt.  When the debt is paid (as a fraudulent preference) the lender returns to the guarantor whatever security the latter has given.  When the lender has to return to the liquidator the payment received he cannot require the guarantor to reinstate his security but the latter continues to be (or if there is no previous personal guarantee by him becomes) personally liable to the lender as a guarantor of the debt: CA, s.313.

Posted Date: 1/15/2013 5:43:04 AM | Location : United States







Related Discussions:- Fraudulent preference - liquidator, Assignment Help, Ask Question on Fraudulent preference - liquidator, Get Answer, Expert's Help, Fraudulent preference - liquidator Discussions

Write discussion on Fraudulent preference - liquidator
Your posts are moderated
Related Questions
A strong and fair health care system Today, I delivered on my commitment to have a judicial inquiry into allegations of queue jumping in our health care system. The governm

State Preamble of the United Nations Charter 'We the Peoples of the United Nations determined to save succeeding generations from the scourge of war...and to reaffirm faith in fu

Lifting the Veil of Incorporation: The legal rule that a registered company is at law a different person altogether from the subscribers to the memorandum of association and o

What are the advantages of doctrine of judicial precedent? Advantages of doctrine of judicial precedent: a. Makes it more clearly in terms of chances of winning case should


Compensation for Loss of Office: (a) Section 192 makes it unlawful for a company to make a director any payment by way of compensation for loss of office, or  may as considera

Question 1: (a) What does Professional Practice mean to you? Define your perception of good Professional Practices. (b) Discuss some of the difficulties and challenges fac

DISCLAIMER OF ASSETS: The liquidator has a statutory right of disclaimer of assets: s.135.  The rules are: (a)     he must obtain leave of the court; (b)     the right o

What is the justification behind the right of innocent passage through territorial waters, when the waters actually form a part of the states sovereign territory? The rational

Third Reading: Now next is offers in Order 112(1) which is on the adoption of a report on a Bill the Third Reading may regarding leave of Mr. Speaker be taken forthwith and wh