(1)
Where a company at any time within the period defined in subsection (6), does anything or procures anything to be done which has the effect of putting a person, being one of the company’s creditors or a surety or guarantor undue advantage shall be deemed a preference of that person, and be invalid accordingly.
(2)
Notwithstanding subsection (1), a preference given to any person is not invalid unless the company which gave the preference was influenced in deciding to give it by a desire to produce in relation to that person the effect mentioned in sub-section (1).
(3)
A company which has given a preference to a person connected with the company (otherwise than by reason only of being its employee) at the time the preference was given is presumed, unless the contrary is shown, to have been influenced in deciding to give it by such a desire as is mentioned in subsection (2).
(4)
The fact that something has been done in pursuance of the order of a Court does not, without more, prevent the doing or procuring of that thing from constituting the giving of a preference.
(5)
Any conveyance or assignment by a company of all its property to trustees in furtherance of the preference for the benefit of all its creditors is void.
(6)
In the case of a preference which is given to a person who is connected with the company (otherwise than by reason only of being its employee), the relevant time is the period of years ending with the onset of insolvency (which expression is defined below), and in any other case, the relevant time is the period of three months ending with the onset of insolvency.
(7)
For the purpose of this section, the onset of insolvency refers to the time of the presentation of a petition for winding-up in the case of a winding-up by or subject to the supervision of the Court or, the passing of a resolution for winding-up in the case of a voluntary winding-up.
(8)
This section applies in the case of a company where—
(a)
the company enters administration ; or
(b)
the company goes into liquidation.