https://www.taxtmi.com/caselaws?id=96866 Whether a post-commencement transaction converting an unsecured deposit into a security was a void disposition under the statutory prohibition and whether the court should validate it. The article explains that dispositions after commencement are prima facie void to protect pari passu distribution; court discretion to validate is limited to exceptional necessity or to preserve the business. Applying these principles, the conversion conferred an undue advantage on the depositor who knew of the winding up, and no necessity or salvage justification existed; absence of fraud did not justify validation. The conclusion recorded is that the court declined to validate the disposition and dismissed the claim. en-us Fri, 26 Sep 1941 00:00:00 +0530 Wed, 11 Jan 2012 16:52:08 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=96866 Whether a post-commencement transaction converting an unsecured deposit into a security was a void disposition under the statutory prohibition and whether the court should validate it. The article explains that dispositions after commencement are prima facie void to protect pari passu distribution; court discretion to validate is limited to exceptional necessity or to preserve the business. Applying these principles, the conversion conferred an undue advantage on the depositor who knew of the winding up, and no necessity or salvage justification existed; absence of fraud did not justify validation. The conclusion recorded is that the court declined to validate the disposition and dismissed the claim. Case-Laws Companies Law Fri, 26 Sep 1941 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=96866