---
title: "Liquidator's letter of demand for repayment of an unfair preference"
url: "https://ailawframework.com/precedents/insolvency-restructuring-and-bankruptcy/unfair-preference-demand-letter"
type: "precedent"
site: "AI Law Framework"
id: "a8-unfair-preference-demand-letter"
area_id: "A8"
kind: "letter"
ai_level: "yellow"
version: 1
law_stated_as_at: "2026-10-17"
---

# 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…

Canonical page: https://ailawframework.com/precedents/insolvency-restructuring-and-bankruptcy/unfair-preference-demand-letter  
Law stated as at: 2026-10-17

Site index for agents: https://ailawframework.com/llms.txt

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.

## Key facts

- Kind: Letter. A letter or email you adapt and send.
- Practice area: [Insolvency, Restructuring & Bankruptcy](https://ailawframework.com/precedents/insolvency-restructuring-and-bankruptcy.md)
- Jurisdictions: Australia
- AI level: Yellow. AI can help in set ways. A lawyer checks specific points before use.
- Law stated as at: 2026-10-17
- Status: Maintained. Checked on 2026-10-17 against the 5 authorities it cites, for Australia.

## 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.

## Authorities

- [Corporations Act 2001 (Cth) s 91 (relation-back day)](https://www.legislation.gov.au/C2004A00818/latest/text)
- [Corporations Act 2001 (Cth) ss 588FA, 588FC, 588FE(2), 588FF, 588FG, 588FI (unfair preferences, voidable transactions, defences, proof after repayment)](https://www.legislation.gov.au/C2004A00818/latest/text)
- [Corporations Act 2001 (Cth) s 588E (presumptions in recovery proceedings)](https://www.legislation.gov.au/C2004A00818/latest/text)
- [Bryant v Badenoch Integrated Logging Pty Ltd 2023 HCA 2 (no 'peak indebtedness rule' under s 588FA(3))](https://www.hcourt.gov.au/cases-and-judgments/judgments/judgments-1998-current/bryant-v-badenoch-integrated-logging-pty-ltd)
- [Legal Profession Uniform Law Australian Solicitors' Conduct Rules 2015 r 34 (dealing with other persons)](https://legislation.nsw.gov.au/view/html/inforce/current/sl-2015-0244)

## Full text and drafting notes

The full text and the drafting notes are not part of this public page. Signed-in firm accounts can read them at https://ailawframework.com/precedents/insolvency-restructuring-and-bankruptcy/unfair-preference-demand-letter and through the signed-in MCP connector https://ailawframework.com/mcp/firm.

*Practice guidance for planning and review. Confirm current primary sources and the requirements of the actual matter. This is general information, not legal advice.*