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Mr Justice David Richards has handed down his judgment in Stanley & Anor (As the Joint Liquidators of New Grass of Manchester Ltd) v TMK Finance Ltd & Anor  EWHC 3349 (Ch) (21 December 2010). The case relates to a claim for relief under ss.238 (transaction at an undervalue) and 241 of the Insolvency Act 1986. Section 238 provides as follows:
"...(2) Where the company has at a relevant time (defined in section 240) entered into a transaction with any person at an undervalue, the office-holder may apply to the court for an order under this section.
(3) Subject as follows, the court shall, on such an application, make such order as it thinks fit for restoring the position to what it would have been if the company had not entered into that transaction.
(4) For the purposes of this section and section 241, a company enters into a transaction with a person at an undervalue if—
(a) the company makes a gift to that person or otherwise enters into a transaction with that person on terms that provide for the company to receive no consideration, or
(b) the company enters into a transaction with that person for a consideration the value of which, in money or money's worth, is significantly less than the value, in money or money's worth, of the consideration provided by the company."
The learned judge's judgment contains a number of interesting points, not least a supportive reference to Professor Sir Roy Goode QC's monograph on corporate insolvency (at paragraph 14).
"This is the ultimate statement of where the law on IVAs is to be found in our great common law...