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ARTICLE · 20 FEBRUARY 2021

Demand from a liquidator for an uncommercial transaction

Madgwicks
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If you are found to have entered into an uncommercial transaction, you may be required to pay back to the liquidator.

AustraliaInsolvency/Bankruptcy/Re-Structuring
Catherine Ballantyne
Catherine Ballantyne

It is not uncommon for businesses to receive a demand from a liquidator claiming they have benefited from an uncommercial transaction however they should not be taken lightly. Recipients should immediately seek specialist legal advice as there can be serious, detrimental effects for failure to act.

I have outlined below some of the factors that you and your lawyer will need to consider when dealing with the liquidator and defending an uncommercial transaction.

What is an uncommercial transaction?

A transaction of a company is an uncommercial transaction of the company if, and only if, it may be expected that a reasonable person in the company's circumstances would not have entered into the transaction, having regard to:

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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. Madgwicks is a member of Meritas, one of the world's largest law firm alliances.

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