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What are Reviewable Transactions?

When a company has entered a formal insolvency process, certain types of antecedent transaction (entered into by the company before the start of the insolvency) may be challenged under provisions in the Insolvency Act. Collectively, these are known as reviewable transactions.

The powers to challenge antecedent transactions exist to:

  • Protect the principle of equality in asset distribution which holds that the available assets of a company in administration or liquidation must be shared equally among its unsecured creditors.
  • Help the insolvency practitioner to achieve the best return to the creditors of the insolvent company as is possible in the circumstances.

The various ways in which a transaction may be challenged are prescribed by the Insolvency Act. They are:

  • Disclaimer of onerous property.
  • Transactions at an undervalue.
  • Preferences.
  • Extortionate credit transactions.
  • Invalid floating charges.
  • Transactions defrauding creditors.
  • Contribution from past directors and shareholders.
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