Preferential Transfer
/ˌprɪfəˈrɛnʃəl ˈtrænsfər/
Definitions
- (n.) A transfer of property or assets made by a debtor to a creditor before bankruptcy that favors that creditor over others, potentially subject to avoidance as a fraudulent conveyance.
The court found the preferential transfer void because it unfairly advantaged one creditor ahead of others.
Forms
- preferential transfers
Related terms
Commentary
Preferential transfers are critical in bankruptcy law, as they ensure equitable treatment of creditors by allowing certain transfers made shortly before insolvency to be reversed.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.