Reviewable transactions - transactions at an undervalue Flashcards
(3 cards)
1
Q
what are the conditions?
A
The court can declare a TAU where:
o No/very little consideration was received;
o The transaction was entered into in the 2 years preceding insolvency;
o The company must have been unable to pay its debts before or as a result of the transaction (s123 IA test to be applied)
2
Q
what presumption applies?
A
If the transaction was entered into with a connected person/company it is rebuttably presumed the company was unable to pay its debts
3
Q
when will the respondent have a defence?
A
Respondent will have a defence if it can satisfy the court that:
o The transaction was entered into in good faith to carry on business (subj.) +
o There were reasonable grounds to believe it would benefit the company (obj.)
