preferred payment insolvency

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Paul Kelly ICHYB

Paul Kelly ICHYB

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  • #3
    If you ask a question, you might get advice!
     
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    Lisa Thomas

    Lisa Thomas

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  • #6
    Happy to add my opinion if you would like a second opinion after speaking with Lee. Feel free to dm me, or call my mobile.
     
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    Elliot Green

    Elliot Green

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  • #7
    Key issue is a preference arises when it is a payment or benefit is given to a creditor who is put into a better position, subject to the company giving it, being influenced by a desire to give rise to that effect. (Section 239 of the Insolvency Act 1986)
     
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    jimbof

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  • #8
    Elliot Green said:
    Key issue is a preference arises when it is a payment or benefit is given to a creditor who is put into a better position, subject to the company giving it, being influenced by a desire to give rise to that effect. (Section 239 of the Insolvency Act 1986)
    Click to expand...
    I'd never read the Act, thanks for sharing. It's interesting as the highlighted portion would seem to be a huge get-out (how do you prove the desire was to put them into a better position?). I see it is assumed automatically to be true though if they are connected to the company other than by virtue purely of being an employee, unless there is clear proof they weren't influenced.
     
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    Lisa Thomas

    Lisa Thomas

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  • #9
    jimbof said:
    I'd never read the Act, thanks for sharing. It's interesting as the highlighted portion would seem to be a huge get-out (how do you prove the desire was to put them into a better position?). I see it is assumed automatically to be true though if they are connected to the company other than by virtue purely of being an employee, unless there is clear proof they weren't influenced.
    Click to expand...
    Exactly. It's pretty much a slam dunk where Directors have preferred themselves.
     
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    louis292

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  • #11
    jimbof said:
    I'd never read the Act, thanks for sharing. It's interesting as the highlighted portion would seem to be a huge get-out (how do you prove the desire was to put them into a better position?). I see it is assumed automatically to be true though if they are connected to the company other than by virtue purely of being an employee, unless there is clear proof they weren't influenced.
    Click to expand...
    Proving that "desire to prefer" is notoriously tricky in court when dealing with unrelated third parties. Usually, liquidators have to rely on circumstantial evidence—like a sudden change in regular payment terms, or paying off a specific supplier while ignoring critical utility bills. It rarely comes down to a smoking gun email; it's almost always about looking at the company's behavior right before everything collapsed.
     
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    Newchodge

    Newchodge

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  • #12
    louis292 said:
    Proving that "desire to prefer" is notoriously tricky in court when dealing with unrelated third parties. Usually, liquidators have to rely on circumstantial evidence—like a sudden change in regular payment terms, or paying off a specific supplier while ignoring critical utility bills. It rarely comes down to a smoking gun email; it's almost always about looking at the company's behavior right before everything collapsed.
    Click to expand...
    Or paying a debt which is subject to a personal guarantee
     
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