What is a Preferential Payment?
This is a payment made to a creditor made: (a) within six months of the winding up of the company (or a longer period in certain circumstances); (b) at a time when the company was insolvent; (c) to an unsecured creditor that should have suspected that the company was insolvent; and (d) where the creditor received a better return than would have been obtained through a dividend in the liquidation. The creditor may need to refund these payments to the liquidator.
