Re Agriplant Services Ltd
Encyclopedia
Re Agriplant Services Ltd [1997] 2 BCLC 598 is a UK insolvency law
UK insolvency law
United Kingdom insolvency law deals with the insolvency of firms and individuals in the United Kingdom. The important statutes are the Insolvency Act 1986, as amended by the Enterprise Act 2002, as well as the Company Director Disqualification Act 1986 and the Companies Act 2006.Insolvency is a...

 case, concerning voidable preferences under s 239 of the Insolvency Act 1986
Insolvency Act 1986
The Insolvency Act 1986 is an Act of the Parliament of the United Kingdom that provides the legal platform for all matters relating to personal and corporate insolvency in the UK.-History:...

. It is an example of what will be considered an unlawful and voidable preference when a company is close to insolvency.

Facts

Agriplant leased some equipment from Closed Asset Finance Ltd (CAF) for its agricultural and earth moving business. It owed £20,000 to CAF, and the debt was guaranteed by Agriplant's majority shareholder, Mr George Sagar. An accountant advised no payments should be made to any creditors, but when Agriplant got more money on one of its contracts, it paid off CAF. It went into liquidation shortly after. One of the liquidators was the accountant. The liquidators sought an order that Mr Sagar or CAF should repay the £20,000 sum. Mr Sagar argued he had no desire to put himself or CAF in a better position before liquidation began.

Judgment

Jonathan Parker J ordered repayment by Closed Asset Finance Ltd of the £20,000. It was indisputable that the payment to CAF improved CAF's position and Mr Sagar's position (because he was going to be liable under the guarantee). It was therefore a voidable preference under the Insolvency Act 1986
Insolvency Act 1986
The Insolvency Act 1986 is an Act of the Parliament of the United Kingdom that provides the legal platform for all matters relating to personal and corporate insolvency in the UK.-History:...

, s.239(4). Mr Sagar had his own liability in mind, so he wanted to reduce Agriplant's debt and his own personal liability.
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