Property Sold To Avoid Insolvency

Where property assets have been disposed of prior to an insolvency there are a number of remedies available to Creditors and Insolvency Practitioners.

Undervalue transactions

Many companies are soldiering through these tough economic times. In some cases they can do so merely because lenders (and possibly HMRC) are reluctant to instigate insolvency procedures to enforce arrears. In doing so, the commercial question for the company of whether to preserve or seek to realise property and assets gives rise to potentially unexpected legal consequences. Such consequences derive from the range of provisions in the Insolvency Act 1986 ("IA86"), which enable insolvency office-holders (liquidators, administrators, trustees in bankruptcy) to look back, scrutinise and pursue remedies in respect of transactions entered into in the period preceding the commencement of formal insolvency processes.