Director information hub: Antecedent transactions
Certain company transactions that may be open to challenge if the company enters liquidation or administration.
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Antecedent transactions
Antecedent transactions are types of transactions a company has made before they go into liquidation or administration.
For example:
If a company enters into transactions that favour one creditor over others, they could be considered antecedent transactions.
Or if a person other than a creditor has benefited from a transaction, to the disadvantage of the creditors, these could also be considered antecedent transactions.
Antecedent transactions are open to challenge by the liquidator or administrator.
Recovery of assets or goods
Where the administrator or liquidator decides that any transactions could be challenged, they will seek to recover the assets for the benefit of all the creditors.
Professional advice or guidance
Some companies may dispose of assets or goods prior to an insolvency in good faith as they try to stay in business.
If your company is at risk of insolvency and you are concerned about a potential transaction, seek professional advice from an accountant or insolvency practitioner.