A liquidator or administrator can challenge a transaction where a company has given a preference, which means putting a creditor in a better position in the event that the company went into liquidation or administration that they would have been otherwise. This applies only if the preference was given to a person connected with the company during the two years ending with the onset of insolvency, or if it was given to any other person during the six months ending with the onset of insolvency.
A liquidator or administrator can also challenge any transaction entered into at an undervalue during the relevant period. This means the company makes a gift or enters into a transaction in which it receives a consideration singularly lower in value than the one it provides, during the two years ending with the onset of insolvency.
They may also challenge an extortionate credit transaction made in the three years ending when the company went into liquidation or insolvency. This must be a grossly exorbitant, which means contravening the ordinary principles of fair dealing, and this is hard to prove.
A transaction defrauding creditors is a transaction at an undervalue made by the company to put assets beyond the reach of someone making a claim, or to prejudice the interests of that person in relation to such a claim. There is no time limit on challenging such a transaction, but intent must be demonstrated.