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ecover the proceeds of sale or to pay the benefits the person received from the
transaction to the company. The court may have difficulties in making a restoration
order if there are changes in circumstance which alter the position of the parties in
the transaction, such as an increase or decrease in the value of the property.
The creditor who received the property may have made some improvements so as to
increase its value. Therefore, he or she would be aggrieved if the court orders him or
her to return the property to the company. The creditor may argue the restoration of
the property to the company would result in other creditors receiving more advantage
than they would have, contrary to the aim of the law.
In the UK, in addition to the order to restore the property or proceeds of sale to the
company, the court is empowered to require any person to pay in respect of any
benefit received to the office-holder. 76 The court has the discretion to order the sums
deemed appropriate, which means the court may order the creditor to pay the value
of property at the time of transaction to the office-holder. 77
Alternatively, the court orders the restoration of the asset to the company and
requires the office-holder to pay an amount representing the improvements made to
it. 78 This order, however, imposes an obligation on the office-holder to search for
funds to pay the creditor and is not practical in considering the company‘s financial
state. 79 If the increase in value of the property increases without any action from the
creditor, it would be appropriate for the court to make a re-vesting order to the
company because the general body of creditors would have obtained the benefit even
76 Section 241(1)(d) of the UK Insolvency Act 1986.
77 The term office-holder refers to the liquidator or the administrator – see section 238(1) and section
239(1) of the UK Insolvency Act 1986.
78 Andrew Keay ―The Recovery of Voidable Preferences: Aspects of Restoration‖ in Francis Rose
(Ed.) Restitution and Insolvency (Mansfield Press LLP Professional Publishing, London, 2000) 237
at 251[―Voidable Preferences‖].
79 Ibid.
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