Letter · Insolvency, Restructuring & Bankruptcy
Liquidator's letter of demand for repayment of an unfair preference
Letter from solicitors for a liquidator to a creditor that received payments before the winding up, setting out the unfair preference case, inviting a defence with evidence, and demanding repayment before proceedings under s 588FF.
- 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
- 17 October 2026
- Status
- Maintained. Checked on 17 October 2026 against the 5 authorities it cites, for Australia.
- Version
- 1
- Source
- Written for this library
When to use it
Use after the liquidator's investigation has identified payments to an unsecured creditor within 6 months before the relation-back day and there is evidence of insolvency at the time. Do not use before the payments, the relation-back day and the insolvency evidence have been checked against source records.
How AI may be used
Close supervision. AI is useful for building the payment chronology and the running-account arithmetic from bank statements, but every payment, date and figure must be traced to a source record and the insolvency case and defences are for the lawyer.
AI may
- Build a chronology of payments to the creditor from bank statements and the creditor ledger, with the statement page and line for each entry.
- Run the running-account calculation on the start point the lawyer has fixed, showing each step, for checking.
- Draft the factual paragraphs describing the payments from the verified chronology.
AI must not
- Must not decide when the company became insolvent or that the creditor had grounds to suspect insolvency.
- Must not choose the start point of a continuing business relationship.
- Must not include any payment or amount that is not traced to a bank statement or ledger entry.
- Must not send the letter or adjust the demand amount without the lawyer's approval.
The lawyer checks
- The relation-back day and the 6-month window are correct for the type of appointment.
- The insolvency evidence relied on is admissible and supports insolvency at each payment date.
- Any running-account analysis follows Bryant v Badenoch [2023] HCA 2.
- The letter is accurate and firm without overstating the claim or making improper threats.
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.
More in Insolvency, Restructuring & Bankruptcy
- Creditor's statutory demand (Form 509H) and verifying affidavit: drafting and service checklist
- Creditor's bankruptcy notice: AFSA online application completion guide
- Letter of advice to directors on insolvent trading and the safe harbour
- Declaration of independence, relevant relationships and indemnities (DIRRI), with appointment lodgement checklist
- Protocol for AI-assisted review of company books and records in insolvency investigations
- AI-use verification checklist for insolvency court documents (winding-up, set-aside and recovery applications)
All precedents for Insolvency, Restructuring & Bankruptcy · Tasks and AI use in this area