Re Conegrade Ltd
|Re Conegrade Ltd|
|Court||Court of Appeal of England and Wales|
|Citation(s)|| EWHC 2411 (Ch),  BPIR 358|
|Insolvency, voidable transaction|
Conegrade Ltd was a small engineering company. It had four directors, two of which were Mr and Mrs Clarke. Conegrade Ltd had a loan account, which included debts for loans by directors to the company. All board members attended a vote, and voted in favour, of selling a freehold property in Station Road, Uppingham, worth £125,000 to Mr and Mrs Clarke. These two directors would then lease the property back to the company, but they paid only £64,808, which was the balance in the loan account. This settled a debt owed by the company to the Clarkes. Conegrade Ltd was insolvent within a year or so. The liquidators argued the transaction was a preference under IA 1986 section 239.
Lloyd J held that the only compelling reason for the transfer was the rightly presumed desire to place Mr and Mrs Clarke in a better position, above the creditors.
- A Dignam and J Lowry, Company Law (2012) 476
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