Insolvency can be a complex business, particularly where disputes arise among creditors around the nature and value of what they are owed from the recorded assets of the insolvent company.
It can become even more complex still where historical payments or transfers pre-dating the insolvency process are called into question as invalid. In the interests of preserving value for legitimate creditors, insolvency practitioners or bankruptcy trustees have the option of attempting to avoid specific transactions and recoup the monies or assets transferred out of the business or estate.
IR Global brought six members of its Insolvency Group together to discuss voidable transactions as part of the Virtual Series collaborations. The following discussion will identify the most common voidable transactions across various jurisdictions and demonstrate how the various insolvency laws deal with the evidentiary process behind voiding.
We will also look at the use of mediation as an alternative to litigation and consider the defences recipient parties can use against any future voiding action.
The following discussion involves IR Global members from the USA (Illinois and Washington D.C.), England, Germany, India and Slovenia.