1. Antecedent transactions
2. Recovery and other consequences
3. Professional advice or guidance

Antecedent transactions

AntecedentSome transactions aremade typesby of transactions a company has made before theyit gogoes into liquidation or administration.administration can be challenged by the liquidator or administrator. These are known as antecedent transactions.

For example:

If

• a company enters into transactions that favour one creditor over others, they could be considered antecedent transactions.

  Or others

• if asomeone person other than a creditor has benefited from a transaction,transaction toor thegift disadvantagethat ofhas thedisadvantaged creditors, these could also be considered antecedent transactions.

  Antecedent transactions are open to challenge by the liquidatorcompany’s or administrator.

  creditors

Recovery ofand assetsother or goodsconsequences

WhereIf the administrator or liquidator decidesbelieves that anya transactionstransaction could be challenged, they will seek to recover the money or assets for the benefit of all the creditors.creditors. 

You could also be disqualified from acting as a company director and there may be other consequences.

Professional advice or guidance

Some companies may dispose of assets or goods prior to anentering insolvency ina goodformal faithinsolvency process as theypart tryof a genuine effort to staycontinue trading and remain in business.

If your company is at risk of insolvency and you are concerned about a potential transaction, you should seek professional advice from an accountant or insolvency practitioner.

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