Past version: effective from 14/06/2015 - 13/06/2015
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(1) Where a Company is in administration or winding-up and has at a relevant time (as defined in Section 259 (Relevant time)) given a preference to any person, the Court may, on application of the administrator of the Company or the liquidator, make an order restoring the position to what it would have been if the Company had not given that preference.
(2) A Company gives a preference to a person if —
(a) that person is one of the Company's creditors or a surety or guarantor for any of the Company's debts or other liabilities; and
(b) the Company does anything or suffers anything to be done which (in either case) has the effect of putting that person into a position which, in the event of the Company going into insolvent liquidation, will be better than the position he would have been in if that thing had not been done.
(3) The Court shall not make an order under subsection (1) in respect of a preference given to any person unless the Company which gave the preference was influenced in deciding to give it by a desire to put the person in the better position described in subsection (2)(b).
(4) A Company which has given a preference to a Connected Person (otherwise than by reason only of being its employee) at the time the preference was given is presumed, unless the contrary is shown, to have been influenced in deciding to give it by a desire to put the Connected Person in the better position described in subsection (2)(b).