Co-operatives Act, 2005 (Act No. 14 of 2005)

Regulations

Co-operatives Administrative Regulations, 2016

Chapter 2 : Winding Up and Judicial Management of Co-operatives

Part A : Winding-Up of Co-operatives

Voidable dispositions

94. Voidable preferences

Purchase

(1)

Any disposition of property made by a co-operative within 180 days before the commencement of its winding-up and which has had the effect of preferring any one or more of its creditors above another may on application by the liquidator be declared void by a competent court if immediately after such disposition was made the liabilities of the co-operative exceeded the value of its assets, unless the person to whom the property was disposed of proves that the disposition was made in the ordinary course of business and that it was not intended thereby to prefer a creditor above another.

(2)

Any disposition of property by a co-operative made at a time when its liabilities exceeded the value of its assets and with the intention of preferring any one or more of its creditors above another may at any time after the commencement of the winding-up of the co-operative on application by the liquidator be declared void by a competent court.

(3)

If the court declares any disposition of property void under sub regulation (1) or (2) the court may summarily issue an order directing that the property disposed of be delivered to the liquidator or that an amount equal to the value of the relevant property as at the date of the disposition thereof be paid to the liquidator.