Insolvency And Re-Structuring Case Reporter

Transactions at undervalue – exercise of Court discretion not to set aside

In both corporate and personal insolvency matters, transactions which have been entered into in the period prior to the insolvency commencing may be set aside if it can be shown that the transfer of assets out of the ownership of the company or individual was made at an undervalue, thus reducing the amount available to creditors.

The recent High Court case of The Trustee in Bankruptcy of Claridge v Claridge considered whether a transaction had been made at undervalue. It was found that a transaction at undervalue had taken place. The judge however declined to make an order in favour of the Trustee in Bankruptcy as under the circumstances it would not be just to do so.