Fraudulent preference treated as surety, imposing liability to the extent of the charge and enabling Tribunal relief. When a winding up transaction is invalidated as a fraudulent preference of a person interested in property charged for the company's debt, that person is liable and entitled as if a surety to the extent of the mortgage or charge or the value of the interest, whichever is less, with value determined at the transaction date as if free of other encumbrances; the Tribunal may determine disputes and grant relief, including joining a surety or guarantor, and the rules apply similarly to non payment transactions.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Fraudulent preference treated as surety, imposing liability to the extent of the charge and enabling Tribunal relief.
When a winding up transaction is invalidated as a fraudulent preference of a person interested in property charged for the company's debt, that person is liable and entitled as if a surety to the extent of the mortgage or charge or the value of the interest, whichever is less, with value determined at the transaction date as if free of other encumbrances; the Tribunal may determine disputes and grant relief, including joining a surety or guarantor, and the rules apply similarly to non payment transactions.
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