A liquidator of an insolvent company and a trustee of a bankrupt's estate are empowered by statute to set aside certain transactions, including payments, entered into or made by a debtor prior to the debtor’s winding up or bankruptcy, as the case may be. This power to avoid antecedent transactions devolves from a legislative attempt to ensure, so far as possible, that creditors receive equal treatment according to an established scheme for the division of a debtor’s assets amongst creditors.
The purpose of this article is to address the following issues: 1. What are the basic features of a liquidator’s power to recover voidable preferences, 2. In what circumstances will a bank be exposed to preferential transactions, and where this occurs, what remedies are available to the bank, if any, to avoid liability?
Purcell, David J.
"Banks and the Recovery of Voidable Preferences,"
Bond Law Review:
1, Article 8.
Available at: http://epublications.bond.edu.au/blr/vol2/iss1/8