Insolvency, Restructuring and Dissolution Act 2018 · 2020 Revised Edition · Part 9 · Provisions Applicable in Judicial Management and Winding Up
225. Unfair preferences
Feedback & supportSubject to this section and sections 226 and 227, where a company is in judicial management or is being wound up, and the company has at the relevant time (as defined in section 226), given an unfair preference to any person, the judicial manager or liquidator (as the case may be) may apply to the Court for an order under this section.
company
“company” has the meaning given by section 4(1) of the Companies Act 1967;
The Court may, on such an application, make such order as it thinks fit for restoring the position to what it would have been if the company had not given that unfair preference.
For the purposes of this section and sections 226 and 227, a company gives an unfair preference to a person if —
that person is one of the company’s creditors or a surety or guarantor for any of the company’s debts or other liabilities; and
the company does anything or suffers anything to be done which (in either case) has the effect of putting that person into a position which, in the event of the company’s winding up, will be better than the position that person would have been in if that thing had not been done.
The Court must not make an order under this section in respect of an unfair preference given to any person unless the company which gave the preference was influenced in deciding to give the unfair preference by a desire to produce in relation to that person the effect mentioned in subsection (3)(b).
A company which has given an unfair preference to a person who, at the time the unfair preference was given, was connected with the company (otherwise than by reason only of being the company’s employee) is presumed, unless the contrary is shown, to have been influenced in deciding to give the unfair preference by such a desire as is mentioned in subsection (4).
The fact that something has been done pursuant to an order of a court does not, without more, prevent the doing or suffering of that thing from constituting the giving of an unfair preference.