• chambersofaagamjain.in
  • 08989406966

Preferential Transaction

Preferential Transaction

A Preferential Transaction refers to a situation where a debtor company, before insolvency, gives undue advantage to certain creditors by paying them or transferring assets in preference over others. Under the Insolvency and Bankruptcy Code (IBC), such transactions are examined to ensure fairness during the Corporate Insolvency Resolution Process (CIRP). The Resolution Professional reviews the company’s financial records to identify any transactions that unfairly prioritize specific creditors. If found, these transactions may be reversed by the Adjudicating Authority to restore equality among stakeholders. Preferential payments typically occur within the “look-back period” defined by law. The aim is to prevent misuse of company assets before insolvency. Creditors who knowingly benefit may face legal consequences. Avoiding such transactions ensures transparency and protects the interests of all creditors. The RP plays a key role in reporting and challenging such actions.

Facebook Twitter Youtube

Quick Links

Address

Chambers of Aagam Jain Chamber No. 455 Saket Court, New Delhi,110017

+91 8989406966

chambersofaagamjain.in

Practices Areas

Copyright © 2025 | Aagam Jain | All rights reserved | Designed & Developed by – G Optimizers

Disclaimer

The information provided on the website of Chambers of Aagam Jain is for general informational purposes only and does not constitute legal advice, solicitation, or advertisement. Accessing or using this website does not create a lawyer–client relationship. Legal matters are fact-specific and subject to applicable laws, and visitors are advised to seek independent legal counsel for guidance suited to their individual circumstances. While efforts are made to ensure the accuracy of the content, no guarantee is given regarding its completeness or correctness. The Chambers of Aagam Jain shall not be liable for any loss or damage arising from reliance on the information provided herein. Any communication through this website does not ensure confidentiality unless a formal professional engagement is confirmed in writing.