Transaction at an undervalue Definition

See All Glossary Terms

Related Glossary Terms

GLOSSARY

What does Transaction at an undervalue mean?

A transaction entered into by a debtor prior to his being adjudged bankrupt, or by a company prior to its entering into administration or going into liquidation, that is liable to be set aside by the court by reason of its having been at an undervalue.

A transaction will have been at an undervalue if it is made for no consideration, it is made in consideration of marriage or the formation of a civil partnership (bankruptcy only) or there is a significant imbalance in the consideration provided by the parties to the transaction. The court will only be able to interfere with such a transaction if it was entered into within a specified period before the debtor was adjudged bankrupt, or the company entered into administration/went into liquidation.

View the related checklists about Transaction at an undervalue

Summary checklist and timeline for transaction at an undervalue and preference claims by a trustee in bankruptcy

Summary checklist and timeline for transaction at an undervalue and preference claims by a trustee in bankruptcy Checklist and timeline This summary checklist and timeline is drafted from the perspective of a claim being commenced under sections 339 and/or 340 of the Insolvency Act 1986 (IA 1986) by a trustee in bankruptcy (trustee). Step/action Time (days) Section/rule 1. Investigate the events and circumstances leading to the debtor’s bankruptcy and the matters giving rise to the claim(s) against the respondent(s) (who would typically be the recipients of the payments/transactions). This would include obtaining the books, papers or records relating to the bankrupt’s estate or affairs which are required to be delivered up to the trustee and interviewing, among others, the bankrupt, the bankrupt’ spouse, former spouse, civil partner or former civil partner and any person appearing to be able to give information about the bankrupt or their dealings, affairs or property. No limit (subject to limitation) IA 1986, ss 365–366 2. Prepare and issue the application containing the information...

Summary checklist and timeline for transaction at an undervalue and preference claims by an administrator or liquidator

Summary checklist and timeline for transaction at an undervalue and preference claims by an administrator or liquidator Checklist and timeline This summary checklist and timeline is drafted from the perspective of a claim being commenced under sections 238 and/or 239 of the Insolvency Act 1986 (IA 1986) by either an administrator or a liquidator, and not by an assignee of any such claim. Step/action Time (days) Section/rule 1. Investigate the events and circumstances leading to the insolvency of the company and the matters giving rise to the claim(s) against the respondent(s) (who would typically be the recipients of the payments/transactions). This would include obtaining the company's books, records, accounting information/statements and bank statements, interviewing directors, former directors and any persons with information concerning the promotion, formation, business dealings, affairs or property of the company.It should be noted that when the office-holder threatens a claim against the respondents, the office-holder is at risk of losing the powers of investigation under IA 1986, ss 235–236 in respect of that claim....

The bankruptcy court's power to set aside financial orders made on divorce or dissolution of a civil partnership

The general position of the bankruptcy and family courtsThe impact bankruptcy and divorce proceedings have on one another has been subject to several cases in both the bankruptcy and family courts. Unfortunately, it is not uncommon for bankruptcy proceedings to exist while divorce proceedings are ongoing, and concurrent proceedings can create conflict when it comes to the division of assets. The timing of when the bankruptcy petition is issued compared to when the family court makes a property adjustment order is crucial in determining the effect bankruptcy proceedings will have on family proceedings. For further reading on bankruptcy and divorce proceedings see:•Bankruptcy and family financial remedy proceedings—overview•Practice Note: The impact of bankruptcy on divorce proceedings•Practice Note: Can the court annul a bankruptcy order obtained in order to defeat the divorce proceedings?•Checklist and timeline showing the impact different stages of bankruptcy proceedings can have on ancillary relief proceedings in a divorce•Practice Note: Dos and don'ts for family lawyers when dealing with bankruptcyThis Practice Note considers what challenges are available to the...

The Pensions Regulator’s moral hazard powers—what should company directors look out for?

The Pensions Regulator’s moral hazard powers—what should company directors look out for? STOP PRESS: On 25 July 2024 the Pensions Regulator (TPR) announced that it had reached an ‘expected settlement’ with ITV over the long running saga involving the Box Clever pension scheme with all of the 2,800 members (both ex Granada and ex Thorn) transferring to the ITV pension scheme. ITV and TPR had been locked in legal challenges and negotiations since 2011 over the broadcaster’s responsibilities to the Box Clever pension scheme. The ‘expected settlement’ means that those Box Clever pension scheme members who have been receiving benefits at Pension Protection Fund (PPF) levels since 2014 will now receive full scheme benefits as well as back payments. On the basis that the transfer proceeds as planned, TPR has agreed to cease its regulatory action against ITV and its associated entities. The parties are currently working on the settlement documentation to be agreed, so that the proposed settlement becomes legally binding. The settlement is also supported...

Discover our 93 Practice Notes on Transaction at an undervalue

Letter to directors in an insolvency situation warning of main legal risks

Letter to directors in an insolvency situation warning of main legal risks You recently came to see us/contacted us as a director of a company in financial difficulties. The purpose of this letter is to bring to your attention some issues that you should be aware of in your capacity as a director of the company and/or in your personal capacity as a director. If a company is solvent and has no financial concerns then, broadly speaking, the company and its directors owe fairly limited duties to creditors. The duties to shareholders takes precedence. However, when a company is insolvent, or is in the ‘twilight zone’, then the directors’ duties shift from being primarily owed to shareholders to creditors. You must be aware of this and act accordingly. Taking the above into consideration, if you are a director of a company in financial difficulties you will need to make difficult decisions regarding the management of the company and, in particular, the treatment of its creditors. You may also...

Witness statement in support of an application to unwind a preference or transaction at an undervalue

Witness statement in support of an application to unwind a preference or transaction at an undervalue Applicant(s): [insert initials and surname]: [insert number of witness statement eg 1st] Exhibit: [insert exhibit description]: Date: [insert date of witness statement] CASE NO: [insert case number] [ IN THE HIGH COURT OF JUSTICE BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES INSOLVENCY AND COMPANIES LIST (ChD) OR IN THE HIGH COURT OF JUSTICE BUSINESS AND PROPERTY COURTS IN [insert location] INSOLVENCY AND COMPANIES LIST (ChD) OR IN THE HIGH COURT OF JUSTICE CHANCERY DIVISION [insert location] DISTRICT REGISTRY OR IN THE COUNTY COURT AT [insert location] ] [ IN THE MATTER OF [insert company’s name] OR IN THE MATTER OF [insert bankrupt’s name] IN BANKRUPTCY ] AND IN THE MATTER OF THE INSOLVENCY ACT 1986 BETWEEN [Insert name(s) of the aPPLICANT(s)] Applicant(s) AND [Insert name(s) of the respondent(s)] Respondent(s) [INSERT NUMBER] Witness statement of [Insert name OF OFFICE-HOLDER] I, [insert name of the office-holder] of...

Dive into our 3 Precedents related to Transaction at an undervalue

Where a bankruptcy order is annulled (payment in full) after the trustee in bankruptcy has successfully pursued a transaction at an undervalue claim, what happens to that claim? Would the transaction be reversed, and would the answer be different if the bankrupt also wanted to reverse the relevant transaction?

Where a bankruptcy order is annulled (payment in full) after the trustee in bankruptcy has successfully pursued a transaction at an undervalue claim, what happens to that claim? Would the transaction be reversed, and would the answer be different if the bankrupt also wanted to reverse the relevant transaction? Challenging a transaction at undervalue When a trustee in bankruptcy (trustee) is successful in challenging a transaction at undervalue under section 339 of the Insolvency Act 1986 (IA 1986), the court will make such order as it thinks fit under IA 1986, s 342 to restore the position to that which it would have been had the transaction not taken place. That might mean that the beneficiary of the undervalue transaction is ordered to pay money to the trustee in respect of the benefit received or to transfer any property to the trustee to vest in the bankruptcy estate. This Q&A looks at the effect of the bankruptcy subsequently being annulled. Annulling a bankruptcy order There is no...

Clients father died intestate—the father owned a property with his ex-partner as joint tenants. Client has a claim with regard to his deceased father's share in the property arising as a result of the doctrine of Promissory Estoppel. Ex-partner has agreed to sell the property to the son for 50% of the market value (£30,000). Is the consideration at panel 8 of the Transfer £30,000? or could it be argued that the Transferor is making a gifted deposit of £30,000 in respect of the late father's interest in the property? How should this be accounted for in the AP1?

Clients father died intestate—the father owned a property with his ex-partner as joint tenants. Client has a claim with regard to his deceased father's share in the property arising as a result of the doctrine of Promissory Estoppel. Ex-partner has agreed to sell the property to the son for 50% of the market value (£30,000). Is the consideration at panel 8 of the Transfer £30,000? or could it be argued that the Transferor is making a gifted deposit of £30,000 in respect of the late father's interest in the property? How should this be accounted for in the AP1? HM Land Registry guidance on the completion of TR1 forms (Guidance: how to complete form TR1) contains the following guidance in respect of panel 8 of form TR1: 'Enter the amount paid for the property being transferred where shown (first box). If the transfer is to be by way of gift, select the second box. If the transfer is for any other consideration, select the third box and enter the details.'...

See the 60 Q&As about Transaction at an undervalue

Restructuring & Insolvency weekly highlights—5 December 2024

This week's edition of Restructuring & Insolvency weekly highlights includes: the need for expert evidence in Part 26A restructuring plans to comply with CPR 35 (Re Chaptre Finance Plc), an analysis of applications to set aside default judgment in insolvency proceedings (Scenic International Group Ltd (in provisional liquidation) v Adenaike), an analysis of successful fraudulent trading and other claims (London Capital & Finance v Thomson), plus a round-up of other news and cases for restructuring and insolvency professionals.

New Checklist—summary checklist and timeline for transaction at an undervalue and preference claims by a trustee in bankruptcy

The ��˾��ҹ�� Restructuring & Insolvency practical guidance team has published a new Checklist—‘Summary checklist and timeline for transaction at an undervalue and preference claims by a trustee in bankruptcy’. This Checklist and timeline sets out the process for bringing claims by a trustee in bankruptcy under sections 339 and 340 of the Insolvency Act 1986 challenging transactions at an undervalue and preferences.

Read the latest 115 News articles on Transaction at an undervalue

238 Transactions at an undervalue (England and Wales)

(1) This section applies in the case of a company where—[(a) the company enters administration,] or(b) the company goes into liquidation;and “the office-holder” means the administrator or the liquidator, as the case may be.(2) Where the company has at a relevant time (defined in section 240) entered into a transaction with any person at an undervalue, the office-holder may apply to the court for an order under this section.(3) Subject as follows, the court shall, on such an application, make such order as it

339 Transactions at an undervalue

(1) Subject as follows in this section and sections 341 and 342, where an individual is [made] bankrupt and he has at a relevant time (defined in section 341) entered into a transaction with any person at an undervalue, the trustee of the bankrupt's estate may apply to the court for an order under this section.(2) The court shall, on such an application, make such order as it thinks fit for restoring the position to what it would have been if that individual had not entered into that transaction.(3) For

Transaction at an undervalue is referenced 3 in UK Parliament Acts

Speed up all aspects of your legal work with tools that help you to work faster and smarter. Win cases, close deals and grow your business–all whilst saving time and reducing risk.

Case studies

"I would say that the amount of time I take to draft a good, comprehensive submission has been cut down by at least 60 to 70%. Having all these sources, commentary and journals at my fingertips is brilliant."

ParrisWhittaker

Access all documents on Transaction at an undervalue

GET ACCESS NOW

Top

Trial

��˾��ҹ��

GLOSSARY