In certain scenarios, liquidators are entitled to invalidate certain transactions which occurred prior to or during the winding up of a company. Some Sydney Insolvency Lawyers and Bankruptcy Lawyers refer to this as a ‘claw back’, which allows the liquidator to recover assets or property conveyed in voidable transactions. Liquidators may be able to void transactions that have been undertaken to defeat creditors, confer preferential treatment on particular creditors or where property has been sold at undervalue. Much of the complex litigation involving high profile Sydney Insolvency Lawyers and Bankruptcy Lawyers involve voidable transactions and claw backs.
In an individual bankruptcy matters, trustees are also bestowed with similar powers to recover property, such as in circumstances where there has been a fraudulent disposition and undue preference.
There are certain types of property and transactions that are exempt from claw backs. Superannuation contributions are generally protected from insolvency and bankruptcy.
An effective defence to the recovery provisions entails the receiver of the property showing that valuable consideration was provided, and the non-existence or otherwise of grounds for suspecting that the company was insolvent at the relevant time.
For further information, we invite you to contact our office and speak with an Insolvency Solicitor or Bankruptcy Solicitor.
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