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{{a|glossary| | {{a|glossary| | ||
[[File:Void.jpg|450px|thumb|center|[https://www.artlimited.net/35486/art/image-far-from-void/en/642461 ''Far from Void''], Michael Dunaj]] | [[File:Void.jpg|450px|thumb|center|[https://www.artlimited.net/35486/art/image-far-from-void/en/642461 ''Far from Void''], Michael Dunaj]] | ||
}}{{d|Voidable preference|/ˈvɔɪdəbl/ /ˈprɛfərəns/|n|}} | }}{{d|Voidable preference|/ˈvɔɪdəbl/ /ˈprɛfərəns/|n|}}: What happens if you create a [[security interest]] or generally prefer one creditor to others and then go ''[[tetas arriba]]'' within a short period. | ||
Depending on where you are from, the [[insolvency]] laws of your land may set aside any such preference, at the petition of your administrator, if it supposes that in creating, it you acted with base motives: preferring one of your buddies, over your legion of other creditors, when the writing was already on the wall. | |||
Most sophisticated jurisdictions have some kind of “anti-deprivation” principle in their insolvency regime which stops a struggling company from preferring some of its creditors over | Most sophisticated jurisdictions have some kind of “anti-deprivation” principle in their insolvency regime which stops a struggling company from preferring some of its creditors over others. There is usually an exception for desperate rearguard actions taken in good faith with a genuine aspiration to stave off calamity, notwithstanding that they might have inadvertently caused it. | ||
In the UK, it is section 239 of the [[Insolvency Act 1986]], and it goes something like this: | In the UK, it is section 239 of the [[Insolvency Act 1986]], and it goes something like this: | ||
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:''(b) the company enters into a transaction with that person for a consideration the value of which, in money or money’s worth, is significantly less than the value, in money or money’s worth, of the consideration provided by the company.''<br>}} | :''(b) the company enters into a transaction with that person for a consideration the value of which, in money or money’s worth, is significantly less than the value, in money or money’s worth, of the consideration provided by the company.''<br>}} | ||
This | This gives an insolvency administrator a wide discretion, and should give those extending credit to struggling companies pause for thought. | ||
But it is a well understood part of the corporate credit landscape. Except when it comes to ''[[special purpose vehicle]]<nowiki/>s''. | |||
===[[Limited recourse]] and voidable preferences=== | ===[[Limited recourse]] and voidable preferences=== |