Letter · Insolvency, Restructuring & Bankruptcy
Creditor’s response to a liquidator’s unfair preference claim, with defence and evidence checklist
A letter for a creditor responding to a liquidator’s demand to repay payments as unfair preferences: requests the liquidator’s evidence, puts the running account and good faith defences, and proposes a without-prejudice resolution, with a checklist of the evidence the creditor needs.
- Kind
- Letter. A letter or email you adapt and send.
- Where it applies
- Australia
- AI use
- Yellow AI can help in set ways. A lawyer checks specific points before use.
- Law stated as at
- 18 October 2026
- Status
- Maintained. Checked on 18 October 2026 against the 4 authorities it cites, for Australia.
- Version
- 1
- Source
- Written for this library
When to use it
Use for a supplier or other creditor that receives a liquidator’s letter claiming that payments received in the 6 months before the relation-back day must be repaid. Send it within the time the liquidator allows, after collecting the account history and the creditor’s knowledge of the company’s position.
Used for these tasks
Each task page says how far AI may help with the task and what the lawyer must review.
How AI may be used
AI may rebuild the account history and run the running-account calculation from the ledger and invoices, and draft the letter, but a lawyer decides which defences to run and checks every factual statement about the creditor’s knowledge.
AI may
- Build a transaction table of invoices, payments, credit terms and balances for the relation-back period from the creditor’s ledger
- Calculate the net reduction in indebtedness across the continuing business relationship, using the start point the lawyer chooses, showing each step
- List the documents and communications that bear on what the creditor knew about the company’s solvency, for the lawyer to review
AI must not
- Must not state what the creditor knew or suspected about the company’s solvency; that comes from the creditor’s people and the documents, checked by the lawyer
- Must not prepare any affidavit or statement for a witness to sign
- Must not admit that the company was insolvent, that payments are preferences, or any amount, without the lawyer’s decision
The lawyer checks
- The payments fall within the period in s 588FE and the liquidator has evidence of insolvency at each payment date
- The running-account start point and calculation are defensible on the account history, and any secured or retention-of-title position is considered (s 588FA(2))
- The good faith defence is supported by the creditor’s actual knowledge: overdue patterns, payment plans, stop-supply decisions, demands and industry information are all reviewed
- Any settlement offer is made without prejudice, accounts for the creditor’s right to prove under s 588FI, and the limitation date for any claim is diarised
Method: how the Green, Yellow and Red levels are decided. This is guidance for planning, not legal advice.
Read the full text
The full text is for signed-in accounts. It is free. When you sign in you can:
- read the whole precedent, with its drafting notes beside it;
- copy it, or download it as a Word file or Markdown;
- add it to your firm’s knowledge base, so colleagues can find it;
- let the AI tools you connect read it from that knowledge base.
The summary, the law it rests on and the AI-use guidance above stay public. Privacy.
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