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Court of Appeal on Voidable Transactions - 30th Apr 2015

Court of Appeal on Voidable Transactions “The peak indebtedness rule is not part of the law in New Zealand”, according to the Court of Appeal, in a decision dismissing two appeals on an issue “significant for both liquidators and creditors generally”.

Liquidators cannot choose the point of “peak indebtedness” as the starting point for their calculation of whether the net effect of credits and debits means that the creditor obtained a preference. Rather, the correct approach is to include all transactions that are part of the running account and within the specified period.

Unfortunately, the Court has left unclear the question of whether transactions should be excluded if they in fact occurred when the company was able to pay its debts.

What does “no peak indebtedness” mean?

Find out here...

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