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Unfair preference
In many legal systems, where a person or company transfers assets or pays a debt to a creditor shortly before going into bankruptcy, that payment or transfer can be set aside on the application of the liquidator or trustee in bankruptcy as an unfair preference.See for example, section 239 of the Insolvency Act 1986 of the United Kingdom, which uses the term 'Preference' rather than 'Unfair Preference'; section 565 of the Corporations Act 2001 of Australialaw on unfair preferences varies from country to country, but characteristically, to set a transaction or payment aside as an unfair preference, the liquidator will need to show that:
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