Who can sue under the voidable transaction and insolvent trading provisions?
The voidable transaction and insolvent trading provisions in the Corporations Act are familiar to many. However the recent case of Edenden v Bignell [2007] NSWSC 1122 provides a useful reminder that, generally speaking, only a liquidator can sue under these provisions. Creditors by themselves usually cannot apply for remedies under these provisions. The facts A creditor commenced proceedings against a company in liquidation and its directors. Amongst other things, the creditor sought orders from the NSW Supreme Court declaring: • that certain payments made by the company to the directors were voidable; and • that the company when under the control of the directors had traded whilst insolvent. Declarations made by a court to this effect would result in some of the elements of the voidable transaction and insolvent trading provisions being established in respect of the company and its directors. The decision Crucially however, only a liquidator can readily sue under the voidable transact
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