259. Relevant time

Past version: effective from 14/06/2015 - 13/06/2015
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(1) The time at which a Company enters into a transaction at an undervalue or gives a preference is a "relevant time" if the transaction is entered into, or the preference is given —
(a) in the case of a transaction at an undervalue or of a preference which is given to a person who is a Connected Person (otherwise than by reason only of being its employee), at a time in the period of two (2) years ending with the onset of insolvency;
(b) in the case of a preference which is not such a transaction and is not so given, at a time in the period of six (6) months ending with the onset of insolvency;
(c) in either case, at a time between the making of an administration application in respect of the Company and the making of an administration order on that application;
(d) in either case, at a time between the filing with the Court of a copy of a notice of intention to appoint an administrator under Part 1 (Administration) and the making of an appointment under that Part; and
(e) in either case, at a time between the presentation of a petition for the making of a winding-up order in relation to the Company and the making of such an order on that petition.
(2) Where a Company enters into a transaction at an undervalue or gives a preference at a time mentioned in subsections (1)(a) or (b) above, that time is not a relevant time for the purposes of Sections 257 (Transactions at an undervalue) and 258 (Preferences) unless the Company —
(a) is at that time unable to pay its debts within the meaning of Section 200 (Definition of inability to pay debts); or
(b) becomes unable to pay its debts within the meaning of Section 200 (Definition of inability to pay debts) in consequence of the transaction or preference,
but the requirements of this subsection (2) are presumed to be satisfied, unless the contrary is shown, in relation to any transaction at an undervalue which is entered into by a Company with a person who is a Connected Person.
(3) In this Part 4 (Protection of Assets in Liquidation and Administration), the "onset of insolvency" means —
(a) in a case where Section 257 (Transactions at an undervalue) or 258 (Preferences) applies by reason of an administrator of a Company being appointed by an administration order, the date on which the administration application is made;
(b) in a case where Section 257 (Transactions at an undervalue) or 258 (Preferences) applies by reason of an administrator of a Company being appointed under Part 1 (Administration) following filing with the Court of a copy of a notice of intention to appoint under that Part, the date on which the copy of the notice is filed;
(c) in a case where Section 257 (Transactions at an undervalue) or 258 (Preferences) applies by reason of an administrator of a Company being appointed otherwise than as mentioned in paragraphs (a) or (b), the date on which the appointment takes effect;
(d) in a case where Section 257 (Transactions at an undervalue) or 258 (Preferences) applies by reason of a Company going into liquidation at a time when the appointment of an administrator ceases to have effect, the date on which the Company entered administration (or, if relevant, the date on which the application for the administration order was made or a copy of the notice of intention to appoint was filed); and
(e) in a case where Section 257 (Transactions at an undervalue) or 258 (Preferences) applies by reason of a Company going into liquidation at any other time, the date of the commencement of winding-up.