Insolvency Act · 2022 Revised Edition · Part 7
209. Preferences
Official textFrom Attorney General's Chambers, unchanged
This section applies to section 208.
Where the company has at a relevant time given a preference to any person, the office holder may apply to the Court for an order under this section.
company
“company” means a company incorporated or registered under the Companies Act;
Subject to subsections (4), (5), (6) and (7), the Court shall, on such an application, make such order as it thinks fit for restoring the position to what it would have been if the company had not given that preference.
Court
“Court”, in relation to a company, means a court having jurisdiction to wind up the company;
For the purposes of this section and section 211, a company gives a preference to a person if —
that person is one of the company’s creditors or a surety or guarantor for any of the company’s debts or other liabilities; and
the company does anything or suffers anything to be done which (in either case) has the effect of putting that person into a position which, in the event of the company going into insolvent liquidation, will be better than the position he would have been in if that thing had not been done.
The Court shall not make an order under this section in respect of a preference given to any person unless the company which gave the preference was influenced in deciding to give it by a desire to produce in relation to that person the effect mentioned in subsection (4)(b).
Insolvency 164
insolvency
“insolvency”, in relation to a company, includes the approval of a voluntary arrangement or the appointment of a judicial manager;
A company which has given a preference to a person connected with the company (otherwise than by reason only of being its employee) at the time the preference was given is presumed, unless the contrary is shown, to have been influenced in deciding to give it by such a desire as is mentioned in subsection (5).
The fact that something has been done in pursuance of the order of a Court does not, without more, prevent the doing or suffering of that thing from constituting the giving of a preference.
Terms defined in s 3
company
Defined · s 3“company” means a company incorporated or registered under the Companies Act;
Court
Defined · s 3“Court”, in relation to a company, means a court having jurisdiction to wind up the company;
insolvency
Defined · s 3“insolvency”, in relation to a company, includes the approval of a voluntary arrangement or the appointment of a judicial manager;