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
Do rates and staff wages come before secured debt like bank mortgages/ loans? What about prsi the employer is supposed to have paid for staff?
.... he would have to prove the debtor "intentionally" preferred that creditor. In the case of payments to the Revenue, it would be difficult to prove "intention" as the Revenue have stronger collection powers than other creditors etc.
Jim Stafford
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