Reviewable transactions

Certain transactions entered into by a company or an individual within a specified period before insolvency or bankruptcy may be set aside, or otherwise adjusted, by the court on the application of an administrator, liquidator or trustee in bankruptcy.

Companies

In relation to a company, the transactions that may be set aside or adjusted by the court are:

•
transactions at an undervalue
•
preferences
•
transactions defrauding creditors
•
extortionate credit transactions
•
certain floating charges

Transactions at an undervalue—companies

A company enters into a transaction with a person at an undervalue if it:

•
makes a gift to him, or otherwise enters into a transaction with him, on terms that the company receives no consideration, or
•
enters into a transaction with him where the value of the consideration it receives is significantly less than that it provides

Where a company has, at a relevant time, entered into a transaction with any person at an undervalue, an administrator or liquidator may apply to court for an order restoring the position to what it would have been if the company had not entered into that transaction.

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