Fraudulent preference, Business Law and Ethics

Assignment Help:

Fraudulent Preference:

Under s.312, any disposition of the company's property and any creation of a charge, fixed or floating, effected during the period of six months before commencement of liquidations void as a fraudulent preference if:

(a) done voluntarily; and

(b) done with the intention of preferring one creditor (or surety) over another;

(c) at a time when the company was insolvent, ie. unable to pay its debts in full.

A "disposition" includes the payment of a debt.  Payment of one creditor with the intention of preferring him to others is a common example of fraudulent preference (if the other conditions are met).

    Case: RE M KUSHLER LTD (1943)

The directors had given personal guarantees of the company's bank overdraft.  They arranged that the company should pay its trade receipts into the account but should not pay its trade debts as they fell due with the result that the bank overdraft was paid off.  Shortly afterwards the company went into insolvent liquidation.


Related Discussions:- Fraudulent preference

What are the functions of the employment relations, Question 1: (A) W...

Question 1: (A) What are the functions of the Employment Relations Tribunal established under the Employment Relations Act 2008? (B) What are the functions of the Commissi

How to calculate capacity of the system, David wants to open a restaurant i...

David wants to open a restaurant in Melbourne. He engages Robert Boyd Pty Ltd, an architectural firm, to design the restaurant interior and exterior including the layout and positi

Interpretation of constitution - high court, Interpretation of Constitution...

Interpretation of Constitution - High Court After then under Section 67(1) of the Constitution gives that whether any question as to the interpretation of the constitution ari

Pooling of assets and liabilities, In 2004 the Corporations and Markets Adv...

In 2004 the Corporations and Markets Advisory Committee proposed that assets and liabilities of companies be aggregated and creditors paid from a common pool which is commonly refe

Scheme at meeting - reconstructions, Scheme at meeting - reconstructions: ...

Scheme at meeting - reconstructions: Following approval of the scheme at meeting(s) application is made to the court for an order to approve and implement the scheme.  At this

Relate the military and economic power with each other, Relate the military...

Relate the military and economic power with each other The balance of military and economic power of equilibrium is therefore desirable. A balance of power is a pre-requisite f

Determine the kinds of advocacy tactics, Determine the kinds of advocacy ta...

Determine the kinds of advocacy tactics The kinds of advocacy tactics employed by policy entrepreneurs in setting agendas and generating support for their proposals may often

Choice of method - reconstructions , Choice Of Method: There are three...

Choice Of Method: There are three statutory methods to be considered:          Where one company offers to acquire the shares of another company and its offer is accepted b

Find the best arguments to oppose the objections, This is a felon in posses...

This is a felon in possession of a firearm case. The defendant and his wife were involved in an argument. The argument became heated enough that the wife called the police through

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd