Unpacking Unfair Preferences Series: Running account defence

It's an unfortunate situation that those who provide a product or service often find themselves in. They've done the work, provided a product, invoiced for the work or product and are therefore entitled to be paid. It can therefore be quite a shock to receive a letter from a liquidator demanding back payment of the money due to an unfair preference.

Madgwicks is pleased to be presenting our eight-part series on unfair preferences as we delve into the practical realities of dealing with an unfair preference. You can find the other articles in this series here.

When a liquidator brings a claim for an unfair preference against a company or individual, there are a number of defences available to them. In our earlier article we discussed the commonly used good faith defence. Another commonly used defence is the running account defence.