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Transaction Avoidance in Insolvencies$
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Rebecca Parry, James Ayliffe, Sharif Shivji, Hamish Anderson, and William Trower

Print publication date: 2018

Print ISBN-13: 9780198793403

Published to Oxford Scholarship Online: March 2021

DOI: 10.1093/oso/9780198793403.001.0001

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PRINTED FROM OXFORD SCHOLARSHIP ONLINE (oxford.universitypressscholarship.com). (c) Copyright Oxford University Press, 2022. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in OSO for personal use.date: 27 January 2022

Destination of Proceeds (Corporate Insolvency)

Destination of Proceeds (Corporate Insolvency)

Chapter:
(p.615) 26 Destination of Proceeds (Corporate Insolvency)
Source:
Transaction Avoidance in Insolvencies
Author(s):

Rebecca Parry

Publisher:
Oxford University Press
DOI:10.1093/oso/9780198793403.003.0032

The key issue in considering entitlements to any sums realized as a result of an avoidance action is whether the recoveries will be caught within the scope of any fixed or floating charge that the company has granted. This vexed question has now been addressed under statute with the insertion of section 176ZB into the Insolvency Act 1986, so that where an office holder has brought a claim, or made an assignment of an avoidance action to recover, in England and Wales, a preference, transaction at an undervalue or extortionate credit transaction or, in Scotland, a gratuitous alienation or unfair preference, any sums recovered will not be treated as part of the company’s net property and so they will be unavailable to meet the claims of floating-charge holders. The position is the same in relation to actions for fraudulent trading and wrongful trading claims.

Keywords:   global recoveries, invalid charges, remedies other than preferences, secured creditors, post-petition dispositions

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