BL - Corp. & Dir. - TUV

Question 1

What are the questions that must be asked when considering voidable transactions?

Answer 1

• Did the transaction involve a ‘connected person’ or ‘associate’?
• Did the transaction take place within the ‘relevant time’?
• Was the company insolvent at the time of the transaction or did it become insolvent as a result of the transaction?
• Is there a presumption available which shifts the burden of proof from the liquidator/administrator to the other party?

Question 2

Transactions at Undervalue
What are the defences against transactions at under value?

Answer 2

the company entered into the transaction in
- good faith and
- business purpose and
- benefit of the company.

Question 3

Transactions at Undervalue
What happens to the purchaser in a transactions at under value?

🎁

Answer 3

Court has discretion to make such order as it thinks fit to restore the position as if the company had not entered into the transaction.

Any order:

• should not be prejudiced provided they were acting in good faith AND for value
• there is a rebuttable presumption that the acquisition was not in good faith where the subsequent purchaser either:
  • had notice of the relevant surrounding circumstances; or
  • was connected

Question 4

Transactions at Undervalue for companies:

When must a TUV have occurred?

Answer 4

Within the 2 years preceding the onset of insolvency (regardless of whether connected)

Question 5

Transactions at Undervalue
Who has to prove that the company was insolvent at the time of the TUV?

Answer 5

the applicant, unless:

where a transaction is entered into with a connected party, insolvency is presumed unless the connected person can prove otherwise.