Section 5: Section 5: Antecedent Transactions
Article 142 - Transactions at an undervalue
(1) Where theCompany has at a relevant time (defined in Article 144) entered into a transaction with any person at an undervalue, theQFC Court may, on application of the officeholder, make an order restoring the position to what it would have been if theCompany had not entered into that transaction.(2) ACompany enters into a transaction with a person at an undervalue if it makes a gift to that person or otherwise enters into a transaction with that person on terms that provide for theCompany to receive no consideration, or 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 theCompany .(3) TheQFC Court shall not make an order under this Article 142 in respect of a transaction at an undervalue if it is satisfied:(A) that theCompany which entered into the transaction did so in good faith and for the purpose of carrying on its business; and(B) that at the time it did so there were reasonable grounds for believing that the transaction would benefit theCompany .Article 143 - Preferences
(1) Where theCompany has at a relevant time (defined in Article 144) given a preference to any person, theQFC Court may, on application of an officeholder, make an order restoring the position to what it would have been if theCompany had not given that preference.(2) For the purposes of this Article 143 aCompany gives a preference to a person if:(A) that person is one of theCompany's creditors or a surety or guarantor for any of theCompany's debts or other liabilities; and(B) theCompany 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 theCompany going into insolventLiquidation , will be better than the position he would have been in if that thing had not been done.(3) TheQFC Court shall not make an order under this Article 143 in respect of a preference given to any person unless theCompany which gave the preference was influenced in deciding to give it by a desire to produce in relation to that person the effect mentioned in Article 143(2)(B).(4) ACompany which has given a preference to aConnected 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 such a desire as is mentioned in Article 143(3).Article 144 - Relevant time under Articles 142 and 143
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 given:(1) in the case of a transaction at an undervalue which is entered into with, or of a preference which is given to, aConnected Person (otherwise than by reason only of being his employee), at a time in the period of two years ending with the commencement ofLiquidation or administration; and(2) in the case of any other transaction at an undervalue or preference at a time in the period of six months ending with the commencement ofLiquidation or administration.Article 145 - Invalid security interests
(1) Where aCompany goes into administration or insolventLiquidation , aSecurity Interest in all or substantially all of theCompany's property is invalid where:(A) theSecurity Interest is created in favour of aConnected Person and was created after a date two years prior to the commencement of administration orLiquidation ; or(B) theSecurity Interest is created after a date one year prior to the commencement of administration orLiquidation and theCompany either was at the date of the creation or became pursuant to the transaction in respect of which theSecurity Interest was created unable to pay its debts as they fell due.(2) Article 145(1) does not invalidate aSecurity Interest to the extent of the value transferred to theCompany or liabilities of theCompany released as a result of the transaction giving rise to the grant of theSecurity Interest .