If a liquidator or trustee has sent you a letter demanding money back citing “unfair preferences” or if they are commencing legal proceedings against you, it is important to understand that you may have legal defences available to either avoid or help minimise the amount that a liquidator/trustee can claw back from you. Receiving a letter like this can be confusing and stressful. The way you choose to deal with the unfair preference claim can have a significant impact on your financial situation and your ability to negotiate a desirable outcome.

The Melbourne based insolvency and litigation team at Madgwicks Lawyers have a reputation for achieving excellent outcomes quickly and at minimal cost for clients dealing with unfair preference claims.

If you have received a letter and want to find out if you have a potential defence, fill in the assessment form below.

We offer a free, no obligation initial phone call to assess your claim and assist you to determine what options may be available to you.

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You may take this assessment if you have received a letter or court proceedings from a liquidator.


When a liquidator is appointed to a company, they have various statutory powers that enable them to make claims against parties in an attempt to recover money for the benefit of the creditors of the company in liquidation.

The most common claims a liquidator will make are for what are known as voidable transactions, namely voidable unfair preference payments. The voidable transactions provisions are set out at s 588FA to 588FF of the Corporations Act 2001 (“Act”).

The idea behind the preference regime is that where one creditor had been paid and others haven’t, it has been ‘preferred’ which isn’t fair. As such, the money they received should be returned and go into the pot to be divided up between all of the creditors.

An unfair preference occurs in situations where a creditor obtains an advantage over other creditors by receiving payment or transfer of assets when they knew (or should have known) the company was insolvent. In such situations, liquidators can pursue and recover the unfair preferences to be distributed amongst all creditors.

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