There are a number of provisions in the Bankruptcy Act 1996 (“the Act) for the recovery of property of the bankrupt which relate to avoiding transactions during various periods prior to bankruptcy and avoiding sham transactions.
The transactions which may be voidable include:
Execution against property of a debtor who becomes a bankrupt (Section 118 of the Act)
Transfer of property for less than market value (Section 120 of the Act)
Transfers to defeat creditors (section 121 of the Act)
Preferences – Transfer of property by person who is insolvent in favour of a creditor is void if the transfer gives the creditor a preference over other creditors and was made in the prescribed period (Section 122 of the Act)
Property which for all intents and purposes is owned by an entity controlled by the bankrupt (Section 139A of the Act)
By far the most common areas of recovery by trustees relate to the proceeds of execution against the debtors property, preferences and S120 transfers at under value.
For further queries or if interested in hiring an insolvency lawyer, please contact Chris Wray on 8320 2951 or Brett Samuel on 8320 2957.
