The case of Managh v Morrison (11/07/11) issues a warning to any company heading towards liquidation and which tries to assign greater benefits to creditors than what is due. In that case, a company assigned causes of action against a firm of solicitors and a real estate agent a year before its liquidation. The causes of action were assigned to a trust in the benefit of the former director of the company. The trust was a creditor of the company at the time of assignment. However, once the company was in liquidation, the liquidator claimed that the transaction was a voidable transaction and applied under the Companies Act 1993 to have it set aside. Section 292(2)(b) of that Act states that an “insolvent transaction” is one which was made whilst the company could not pay its debts and where it enables the other person to receive more in satisfaction of their debt than they would under the liquidation. The High Court found in favour of the liquidator and held that the transaction was voidable since the assignee was likely to receive more towards its debt than it would under the liquidation.