A voidable transaction is a payment of money, transfer of property or other transaction from the company’s assets to a related or unrelated third party that either occurs at a time when the company was insolvent or otherwise causes a detriment to the company.
The responsibility of a liquidator is to distribute a company’s assets whilst ensuring that no creditors are being unfairly advantaged or disadvantaged. If a voidable transaction has taken place prior to the appointment of a Liquidator, then the Liquidator has the power to avoid these transactions under the Corporations Act 2001 (Cth), to ensure that assets are distributed fairly amongst creditors.
For all voidable transaction claims, the Liquidator has the later of 3 years from when first appointed as Administrator, Liquidator or the proceedings to wind-up the company are first filed (defined below as the relation-back day) or 1 year from when the Liquidator is first appointed as a liquidator to commence proceedings for a voidable transaction.
Our Guide to Corporate Voidable Transactions will assist you with understanding the most important aspects of voidable transactions, including: