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ARTICLE · 01 JULY 2026

Voidable Transactions And Director Risk What Can Be Reversed

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Voidable transactions allow liquidators to reverse pre-liquidation dealings that unfairly reduced creditor assets or improperly benefited certain parties. Under Part 5.7B of the Corporations Act 2001, liquidators can investigate unfair preferences, uncommercial transactions, and creditor-defeating dispositions—potentially years after they occurred—exposing directors, creditors, and related entities to repayment claims, examinations, and regulatory scrutiny.

AustraliaInsolvency/Bankruptcy/Re-Structuring
Wayne Davis
Wayne Davis
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Article Summary

Voidable transactions are transactions entered before liquidation that can later be reversed by a liquidator because they unfairly reduced the assets available to creditors or improperly benefited particular parties.

Under Part 5.7B of the Corporations Act 2001 (Cth), liquidators can investigate and recover unfair preferences, uncommercial transactions, unreasonable director-related transactions, and creditor-defeating dispositions, often years after the transaction occurred.

Directors, creditors, suppliers, and related entities may face repayment claims, public examinations, compensation proceedings, or regulatory scrutiny where insolvency indicators existed at the time of the transaction.

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