LAW

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© John ORR.

TOPIC 8.2

*****‘TAKEAWAYS’***** (key points to be remembered)

Insolvency (meaning of and significance) Distinguish the types of liquidations (Voluntary v compulsory) Winding up in insolvency (including statutory demand process) Assets available and the role of the liquidator re voidable transactions.

Types of liquidation:

Original Source: Fisher, Wiseman & Anderson 2001, p. 435

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© John ORR.

…..

A transaction of the company may be voidable and could be challenged by the

liquidator:

Voidable Transactions

where company being

wound up

s 588FE

insolvent transactions (s 588FC) 6 months* s 588FE(2)

uncommercial transactions (s 588FB), 2 years* s 588FE(3)

Related party transaction (s 588FC) 4 years* s 588FE(4)

Transaction with a designed to defeat

creditor

10 years* s 588FE(5)

unfair loans to a company (s 588FD) No limit s 588FE(6)

unreasonable director-related transactions

(s 588FDA).

4 years* s 588FE(6A)

Voidable transaction

when under VA or

DoCA before being

wound up.

-uncommercial transactions (s 588FB); or

-unfair preferences (s 588FA); or

-unfair loans to a company (s 588FD); or

-unreasonable director-related

transactions (s 588FDA).

s 588FE(2A) s 588FE(2B)

*ending on relation-back day = day order for winding up is made; s 9 or if VA

preceded the winding up the day the VA began; s 513C

Winding up in insolvency

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© John ORR.

(Original Source: Fisher, Wiseman & Anderson, 2001, p. 439)