33:
565:) who must make up the loss and the third party beneficiaries will usually retain the benefit. However, it is legally possible for a single transaction to be simultaneously fraudulent trading and a fraudulent conveyance, and to be the subject on concurrent applications. Some legal systems permit a director who makes a contribution to the company's assets pursuant to an order for fraudulent trading to
561:, but the key distinction is that an application to have a transaction set aside as a fraudulent conveyance usually requires to the third party beneficiary to disgorge the benefit of the conveyance to undo the loss to the company's assets, whereas a court order in relation to fraudulent trading it is the responsible parties (usually the
584:" (or "insolvent trading") where the burden of proof is lower. Where applications are brought for fraudulent trading, it is usually because when the trading occurred, the company was not insolvent at that time (insolvency at the time of the trading is normally a requirement to establish wrongful trading, but not fraudulent trading).
554:, it appears to the liquidator that fraudulent trading has occurred, the liquidator may apply to the court for an order any persons who were knowingly parties to the carrying on of such business are to be made liable to make such contributions (if any) to the company's assets as the court thinks proper.
32:
587:
The effect of a successful application for fraudulent trading varies between different legal systems. In some countries, the assets contributed by the directors are treated as general assets which may be taken by any
611:", which focuses purely upon the abuse of inside information in relation to financial markets for personal financial gain, and is wholly unrelated to creditor's rights or insolvency law.
640:
720:
600:). However, some countries have "ring-fenced" payments made for fraudulent trading so that they are made available to the pool of assets for
336:
392:
321:
192:
448:
59:
633:
362:
521:
187:
838:
626:
757:
693:
681:
84:
417:
580:. Usually, even where fraudulent trading is suspected, an application is made with respect to an allegation of "
387:
737:
412:
407:
372:
64:
402:
468:
357:
572:
In practice, applications for orders in respect of fraudulent trading are rare because of the high
514:
397:
382:
367:
352:
238:
495:
485:
438:
326:
264:
115:
94:
705:
228:
823:
573:
558:
433:
331:
223:
207:
161:
140:
135:
443:
49:
8:
833:
828:
710:
507:
377:
601:
562:
463:
171:
593:
490:
473:
458:
305:
233:
125:
74:
727:
589:
581:
300:
269:
166:
130:
569:
to any claim that the company might have with respect to a fraudulent conveyance.
608:
597:
285:
69:
779:
765:
657:
798:
For example, in the United
Kingdom, see section 213 of the Insolvency Act 1986
817:
202:
749:
669:
618:
99:
79:
566:
551:
259:
89:
479:
54:
24:
197:
539:
295:
156:
120:
596:
which attaches to all the company's assets (characteristically, a
807:
In the United
Kingdom, see section 423 of the Insolvency Act 1986
453:
577:
607:
Fraudulent trading is entirely separate and distinct from "
290:
557:Conceptually, fraudulent trading is similar to a
815:
722:Jetivia SA v Bilta (UK) Limited (in liquidation)
16:Doing business with intent to defraud creditors
634:
515:
648:
641:
627:
522:
508:
538:is doing business with intent to defraud
816:
622:
13:
31:
14:
850:
758:Re Augustus Barnett & Son Ltd
682:Re Augustus Barnett & Son Ltd
694:Re a Company (No 001418 of 1988)
801:
792:
1:
738:United Kingdom insolvency law
550:Where during the course of a
7:
773:
711:[2003] EWCA Civ 289
10:
855:
839:United Kingdom company law
734:
717:
702:
690:
678:
666:
654:
469:History of bankruptcy law
785:
649:Fraudulent trading cases
614:
239:Voidable floating charge
486:Pre-packaged insolvency
439:Bankruptcy alternatives
327:Cross-border insolvency
265:Trading while insolvent
116:Insolvency practitioner
95:Provisional liquidation
728:[2015] UKSC 23
706:Morphitis v Bernasconi
545:
229:Undervalue transaction
36:
559:fraudulent conveyance
434:Anti-deprivation rule
332:Insolvency Regulation
224:Fraudulent conveyance
208:Scheme of arrangement
162:Preferential creditor
141:Trustee in bankruptcy
136:Referee in Bankruptcy
35:
602:unsecured creditors
188:Administration (UK)
536:fraudulent trading
464:Financial distress
337:UNCITRAL Model Law
255:Fraudulent trading
172:Unsecured creditor
37:
744:
743:
594:security interest
590:secured creditors
532:
531:
491:Sovereign default
474:List of bankrupts
444:Creditors' rights
306:Security interest
234:Unfair preference
216:Avoidance regimes
126:Regulatory agency
846:
808:
805:
799:
796:
723:
643:
636:
629:
620:
619:
582:wrongful trading
576:associated with
534:In company law,
524:
517:
510:
301:Second lien loan
270:Wrongful trading
167:Secured creditor
21:
20:
854:
853:
849:
848:
847:
845:
844:
843:
814:
813:
812:
811:
806:
802:
797:
793:
788:
776:
745:
740:
730:
721:
713:
698:
686:
674:
662:
650:
647:
617:
609:insider trading
598:floating charge
592:who may have a
574:burden of proof
548:
528:
322:Chapter 15 (US)
286:Floating charge
193:Chapter 11 (US)
70:Conservatorship
17:
12:
11:
5:
852:
842:
841:
836:
831:
826:
810:
809:
800:
790:
789:
787:
784:
783:
782:
780:UK company law
775:
772:
771:
770:
766:Re Sarflax Ltd
762:
754:
742:
741:
735:
732:
731:
718:
715:
714:
703:
700:
699:
691:
688:
687:
679:
676:
675:
667:
664:
663:
658:Re Sarflax Ltd
655:
652:
651:
646:
645:
638:
631:
623:
616:
613:
547:
544:
530:
529:
527:
526:
519:
512:
504:
501:
500:
499:
498:
493:
488:
483:
476:
471:
466:
461:
456:
451:
449:Chapter 9 (US)
446:
441:
436:
428:
427:
423:
422:
421:
420:
415:
413:United Kingdom
410:
405:
400:
395:
390:
385:
380:
375:
370:
365:
360:
355:
347:
346:
342:
341:
340:
339:
334:
329:
324:
316:
315:
311:
310:
309:
308:
303:
298:
293:
288:
280:
279:
275:
274:
273:
272:
267:
262:
257:
249:
248:
244:
243:
242:
241:
236:
231:
226:
218:
217:
213:
212:
211:
210:
205:
200:
195:
190:
182:
181:
177:
176:
175:
174:
169:
164:
159:
151:
150:
146:
145:
144:
143:
138:
133:
128:
123:
118:
110:
109:
105:
104:
103:
102:
97:
92:
87:
82:
77:
72:
67:
62:
60:Chapter 7 (US)
57:
52:
50:Administration
44:
43:
39:
38:
28:
27:
15:
9:
6:
4:
3:
2:
851:
840:
837:
835:
832:
830:
827:
825:
822:
821:
819:
804:
795:
791:
781:
778:
777:
768:
767:
763:
760:
759:
755:
752:
751:
747:
746:
739:
733:
729:
725:
724:
716:
712:
708:
707:
701:
696:
695:
689:
684:
683:
677:
672:
671:
665:
660:
659:
653:
644:
639:
637:
632:
630:
625:
624:
621:
612:
610:
605:
603:
599:
595:
591:
585:
583:
579:
575:
570:
568:
564:
560:
555:
553:
543:
541:
537:
525:
520:
518:
513:
511:
506:
505:
503:
502:
497:
496:Subordination
494:
492:
489:
487:
484:
482:
481:
477:
475:
472:
470:
467:
465:
462:
460:
457:
455:
452:
450:
447:
445:
442:
440:
437:
435:
432:
431:
430:
429:
425:
424:
419:
418:United States
416:
414:
411:
409:
406:
404:
401:
399:
396:
394:
391:
389:
386:
384:
381:
379:
376:
374:
371:
369:
366:
364:
361:
359:
356:
354:
351:
350:
349:
348:
344:
343:
338:
335:
333:
330:
328:
325:
323:
320:
319:
318:
317:
314:International
313:
312:
307:
304:
302:
299:
297:
294:
292:
289:
287:
284:
283:
282:
281:
277:
276:
271:
268:
266:
263:
261:
258:
256:
253:
252:
251:
250:
246:
245:
240:
237:
235:
232:
230:
227:
225:
222:
221:
220:
219:
215:
214:
209:
206:
204:
203:Restructuring
201:
199:
196:
194:
191:
189:
186:
185:
184:
183:
180:Restructuring
179:
178:
173:
170:
168:
165:
163:
160:
158:
155:
154:
153:
152:
148:
147:
142:
139:
137:
134:
132:
129:
127:
124:
122:
119:
117:
114:
113:
112:
111:
107:
106:
101:
98:
96:
93:
91:
88:
86:
83:
81:
78:
76:
73:
71:
68:
66:
63:
61:
58:
56:
53:
51:
48:
47:
46:
45:
41:
40:
34:
30:
29:
26:
23:
22:
19:
824:Business law
803:
794:
764:
756:
750:R v Grantham
748:
719:
704:
692:
680:
670:R v Grantham
668:
656:
606:
586:
571:
556:
549:
535:
533:
478:
403:South Africa
254:
100:Receivership
80:Examinership
18:
408:Switzerland
260:Misfeasance
90:Liquidation
75:Dissolution
834:Bankruptcy
829:Insolvency
818:Categories
567:subrogated
552:winding-up
480:Pari passu
345:By country
131:Liquidator
55:Bankruptcy
25:Insolvency
563:directors
540:creditors
383:Hong Kong
358:Australia
198:Cram down
149:Claimants
108:Officials
42:Processes
774:See also
761:BCLC 170
685:BCLC 170
353:Anguilla
296:Mortgage
278:Security
247:Offences
157:Creditor
121:Tribunal
697:BCC 526
459:Default
393:Ireland
769:Ch 592
753:QB 675
673:QB 675
661:Ch 592
454:Debtor
398:Russia
373:Cayman
368:Canada
786:Notes
726:
709:
615:Cases
578:fraud
426:Other
388:India
378:China
736:See
291:Lien
546:Law
363:BVI
85:IVA
65:CVA
820::
604:.
542:.
642:e
635:t
628:v
523:e
516:t
509:v
Text is available under the Creative Commons Attribution-ShareAlike License. Additional terms may apply.
_(style_of)_-_A_Hand_Holding_an_Empty_Purse,_The_Emblem_of,_%E2%80%98No_suffering_can_compare%27_(with_that_of_the_bankrupt_spendthrift)_-_1298194_-_National_Trust.jpg){kind=spacer}