Preferential transactions (section 239 Insolvency Act 1986)
Section 239(4) of the Insolvency Act 1986 provides that 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. In order for a transaction to be successfully attacked as a preferential transaction, the company must have given the preference within a 'relevant time' which is six months ending on the onset of insolvency for an unconnected person and two years for a connected person. However, for the time to be 'relevant', the company must have been insolvent at the time of entering into the transaction or to have become so, as a result of the transacti
