Voidable transactions are payments or asset transfers that either occur when the company is insolvent or are made against the company’s interests.
Transactions that are against the company’s interests may include:
- Unfair loans
- Unfair preference payments
- Uncommercial transactions
- Unreasonable director-related transactions
If a liquidator is appointed, they have the power under the Corporations Act 2001 (Cth) to avoid any prior voidable transactions made, in order to ensure the fair distribution of the company’s assets.
For more information about liquidators and their role, read our blog posts: How do you choose the right liquidator?