9.2 Corporate Insolvency

Question 1

Which is wider - associates under 435 IA or CP under 252 CA

Answer 1

435 IA

Question 2

Who cannot bring claim for misfeasance against D

Answer 2

A

Question 3

Where are ‘CPs’ defined for voidable transactions in IA

Answer 3

249

Question 4

When do clawback and personal liability of Ds not apply

Answer 4

If only in receivership - must be L/A

Question 5

What is the max time D can be disqualified under CDDA

Answer 5

15 years

Question 6

WT under IA - where

Answer 6

214 + 246ZB

Question 7

Who can bring a transaction defrauding creditor

Answer 7

Victim, e.g. creditor

Question 8

Two other considerations if FT claim applies (for personal liability)

Answer 8

s.10 CDDA and it is a crime under 993 CA

Question 9

When is the ‘onset of insolvency’

Answer 9

Issue of winding up petition

Question 10

What test is used for ‘every step’ defence and knowledge under 214 WT

Answer 10

The higher of objective and subjective test

Question 11

Four voidable transactions by company

Answer 11

Undervalue, preference, avoidance of certain floating charges and transactions defrauding creditors

Question 12

Does the court consider the effect of ordering repayment under 239 preferences on beneficiary

Answer 12

No

Question 13

How does the ‘relevant time’ for voidable transactions work

Answer 13

backwards from I onset

Question 14

When will FT apply

Answer 14

If knew insolvency, but still incurred credit

Question 15

Where are the clawback provisions in IA

Answer 15

238 - 241

Question 16

What is the GF and reasonable grounds defence for 238 undervalue - what kind of test

Answer 16

Objective

Question 17

What is a transaction at undervalue

Answer 17

Gift/significantly lower than MV

Question 18

What is s.6 CDDA

Answer 18

Unfit

Question 19

What about L’s expenses in clawback claim

Answer 19

Recovers even if loses claim

Question 20

What single insolvency test is used for personal liability of Ds

Answer 20

BS

Question 21

When will 423 always be considered

Answer 21

If 238 applies (undervalue)

Question 22

Who alone can make D personally liable for misfeasance

Answer 22

Only L

Question 23

What action for D’s personal liability requires actual dishonesty

Answer 23

FT

Question 24

Three-stage test for preference by company

Answer 24

Given to C/S, in better position, and desire to prefer

Question 25

What is s.4 CDDA

Answer 25

Fraud in winding up

Question 26

What may D be liable for if clawback against other beneficiary

Answer 26

Misfeasance (212) and/or s.6 CDDA

Question 27

Why is 423 harder than 238

Answer 27

Intent to prejudice required

Question 28

Why is it easier to bring 423 claim successfully if short time since transaction

Answer 28

To prove 'intent to prejudice'

Question 29

What is s.10 CDDA

Answer 29

F/WT

Question 30

What voidable transaction has a three-stage test

Answer 30

Preference

Question 31

When will a floating charge voided under 245 stay valid

Answer 31

To extent any new money given in consideration

Question 32

Can D avoid WT liability by resigning

Answer 32

Only if done everything they can to convince other Ds

Question 33

What is not a 'desire to prefer' for 239

Answer 33

Commercial pressure

Question 34

What do clawback provisions help to do

Answer 34

Restore funds that should have been available to creditors

Question 35

When does the burden shift in 245 avoidance of certain floating charges

Answer 35

For 'insolvency' if to CP

Question 36

How many potential claims personally against D

Answer 36

Four

Question 37

FT under IA - where

Answer 37

213 + 246ZA

Question 38

What may additionally happen if 245 applies (avoidance of certain floating charges)

Answer 38

Transaction may also be void under UV/preference

Question 39

Who does FT claim apply against

Answer 39

Any person

Question 40

When does the burden shift in transaction at undervalue

Answer 40

In 'insolvency' if CP

Question 41

What will bank be concerned about when using representatives to guide company to avoid insolvency

Answer 41

That reps = shadow Ds, and thus liable

Question 42

What case applies to 245 avoid floating charge

Answer 42

Clayton's Case

Question 43

How might charge avoided under 245 eventually cover all money

Answer 43

If some money given at beginning, and then pay back, and then draw down again

Question 44

How many clawback provisions

Answer 44

4

Question 45

When does the burden shift in 239 preference by company

Answer 45

Not for insolvency, but yes for 'desire' if to CP

Question 46

Why is 423 perhaps more beneficial than 238

Answer 46

No relevant time

Question 47

What are two of the four tests of insolvency

Answer 47

CF and BS

Question 48

Where is misfeasance in IA

Answer 48

212

Question 49

What two other considerations if WT claim applies (for personal liability)

Answer 49

S.6 and s.10 CDDA may apply

Question 50

What personal liability of D is also a crime

Answer 50

FT under 993 CA

Question 51

Where are four tests of 'insolvency'

Answer 51

123 IA

Question 52

Who can bring F/WT claim

Answer 52

L and A

Question 53

What voidable transaction is automatic

Answer 53

Avoidance of floating charge under 245

Question 54

What is it unclear about the application of 238 IA

Answer 54

If applies when granting security w/o consideration

Question 55

Does avoidance of transactions unwind those transactions?

Answer 55

No

Question 56

Why does 1157 not apply to let court give relief to D from BoD

Answer 56

Bc D has acted unreasonably

Question 57

What should L/A check before avoiding floating charge

Answer 57

If properly registered under 859A - if not, 859H

Question 58

What do you always mention when advising company on entering into transaction that may be avoided in insolvency

Answer 58

Although claim not made against the company but against third party, the Ds can be liable for misfeasance and/or disqualified as being unfit under s.6 CDDA