Unfair Preference Claims & Liquidation - Challenging Claims for Repayment
Have you received a demand from a liquidator to repay money you received from a client or customer? Not all is lost, as there may be potential defences available to you under the Corporations Act 2001 (Act). Part 5.7B of the Act gives liquidators the power to claw back certain transactions made by an insolvent company to unsecured creditors. Unfair preferences are the most common type of voidable transaction. The rationale behind these provisions is to ensure creditors are not provided a preferential advantage over other creditors who are also owed money from the insolvent company.