When doing deals with the bank it can be a good idea to show a comparison of what the banks would get in a bankruptcy as opposed to the proposal. A heavy level of Preferential Creditors could motivate the bank to accept a proposal.
there are a number of Prefs in a bankruptcy, such as rates, wages of staff etc. In the Revenue's case, a preferential debt means:
· The VAT/PREM/RCT tax debt for twelve months prior to the date the Protective Cert (in the case of a PIA/DSA) or the date of bankruptcy
· The twelve month IT/CGT period with the largest tax debt and any interest chargeable on the period.
Jim Stafford