Restitution Discussion Group Archives
| Sender: |
Allan Axelrod |
| Date: |
Wed, 3 Mar 2004 13:42:29 -0500 |
| Re: |
Preference |
From: Kevin Kilgour
Do the restitutionary remedies to voidable
preferences and transactions at an undervalue adequately deter attempts
to execute these transactions? ...
there ought to be some kind of further
punishment ...
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. ========================================
Aren't the two cases [preference, as v. transfer without
sufficient consideration] quite different 'morally'? in the preference
case the debtor does owe, and the creditor [even if closely connected]
is entitled to, the money. If then on the eve of bankruptcy the debtor
with insufficient assets would rather pay off his sister-in-law than the
bank, that does frustrate equality of distribution, but is it 'bad faith'
or 'immoral'? Deserves applause: but i have no sermon with respect to
distributions to corporate insider creditors.
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