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I am a student with an idea for a final year dissertation and would be grateful if somebody could offer me thoughts or points of reference for the following issue:

Do the restitutionary remedies to voidable preferences and transactions at an undervalue adequately deter attempts to execute these transactions?

I thought this might make an interesting review of s.238/s.239 UK Insolvency Act 1986 - my initial thought (based on an article by Adler - (1995) 62 U Chicago LR 575) was that even with the costs involved, where the only punishment is transaction avoidance there will nearly always be an incentive to enter into one of these transactions if you are a creditor.

My second thought was that perhaps there ought to be some kind of further punishment (such as personally bankrupt parties may endure through Bankruptcy Restriction Orders) to those that enter into these transactions in bad faith and with a presumption of bad faith in transactions involving closely connected persons.

I have yet to explore the topic fully, but I hope to show that such an addition would achieve the aims of an economic analysis by deterring reduction to the common pool of assets, and fit in with moral thought as it requires bad faith (which would parallel good faith defences to an avoidance in s.241(2). The closely connected persons part of my suggestion was aimed at overcoming the costs and difficulties of proving bad faith.

Thank you in advance to all who respond

Yours - Kevin Kilgour UCL Laws

K Kilgour