If you are an individual or creditor of an individualual, Oliver Elliot can help you address your concerns arising from the insolvency and section 339 of the insolvency act 1986.
How can an Insolvency Practitioner use Section 339 of the Insolvency Act 1986 to recover money and property transferred at an undervalue?
Section 339 of the Insolvency Act 1986 can be used by the Insolvency Practitioner to issue legal proceedings for compensation following when company assets and property has been transferred within two years (and in some cases up to five years) of the commencement of insolvency of an individual at an undervalue. This is known as an antecedent transaction.
339 Transactions at an undervalue.
(1) Subject as follows in this section and sections 341 and 342, where an individual is made bankrupt and he has at a relevant time (defined in section 341) entered into a transaction with any person at an undervalue, the trustee of the bankrupt’s estate may apply to the court for an order under this section.
(2) The court shall, on such an application, make such order as it thinks fit for restoring the position to what it would have been if that individual had not entered into that transaction.
(3) For the purposes of this section and sections 341 and 342, an individual enters into a transaction with a person at an undervalue if—
(a) he makes a gift to that person or he otherwise enters into a transaction with that person on terms that provide for him to receive no consideration,
(b) he enters into a transaction with that person in consideration of marriage or the formation of a civil partnership, or
(c) he enters into a transaction with that person for a consideration the value of which, in money or money’s worth, is significantly less than the value, in money or money’s worth, of the consideration provided by the individual.
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