Office holders will be aware that the issue of preference by
companies is governed by section 239 of the Insolvency Act 1986.
That section states that a company gives preference to a person if
the company ...does anything or suffers anything to be done
which has the effect of putting that person into a position
which... will be better than the position he would have been in if
that thing had not been done before. A commonly used example
is where a director who has provided a personal guarantee to the
company's bank causes the company to repay the bank before
other creditors, thereby putting himself in a better position in
the event of the company's insolvency.
Until now, there has been no clarification of how a company may
'suffer' an act to be done. However, the High Court in
Re Parkside International Limited (in administration) [2008]
EWHC 3654 (Ch) has recently provided guidelines.
