A transaction that a liquidator believes was either not beneficial or detrimental to the company is an uncommercial transaction. This differs from unreasonable director related transactions in that it doesn’t specifically involve directorsto be considered uncommercial.
Related: See Unreasonable Director Related Transactions
A director of a company that may have an Uncommercial Transaction claim brought against them by a Liquidator. C&N Turnaround Solutions can advise clients on how they could potentially reduce or eliminate the amount required to be repaid.
To be able to void an uncommercial transaction, the liquidator must show (amongst other things) that:
Unlike unfair preferences, the other party to the transaction does not have to be a creditor of the company. It can be any third party who enters into a transaction with the company. But often the other party is related to the company and the Act contains special provisions that assist liquidators void uncommercial transactions with related parties.
When a director of a company receives a demand for an Uncommercial Transaction from a Liquidator.
Reduction or elimination of the amount required to be repaid by the client to a Liquidator by assisting the client to provide their defences to such a claim, or to engage an appropriately qualified Lawyer to defend them.
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