Question

Consider what is meant by an ‘antecedent transaction’ and why might a liquidator pursue such transactions ?

Answer 1

ANTECEDENT TRANSACTIONS

ANTECEDENT TRANSACTIONS ARE SPECIFIC TYPES OF TRANSACTION THAT WERE MADE PRIOR TO A COMPANY'S INSOLVENCY. THEY MAY BE REVERSIBLE BY A LIQUIDATOR OR ADMINISTRATOR IF THE COMPANY WAS INSOLVENT AT THE TIME THEY WERE MADE, OR CAUSED THE COMPANY TO BECOME INSOLVENT AT A LATER DATE

LIQUIDATOR CAN REVERSE THE ANTECEDENT TRANSCATION. HE CAN REVERSE UPTO 2 PREVIOUS YEAR TRANSACTION. HE PURSUE THESE TRANSACTIONS SO THAT IF ANY WRONG TRANSACTION IS TAKEN PLACE THEN HE CAN REVERSE THE TRANSACTION.

THE LIQUIDATOR ALSO CAME TO KNOW ABOUT THE POSITION OF THE BUSINESS FROM THE ANCEDENT TRANSACTION AND IF ANY FRAUD IS FOUND OUT THEN ALSO THE FRAUD CAN BE FIND OUT FROM THE ANTECEDENT TRANSACTIONS