Fraudulent Preference

Legal Definition and Related Resources of Fraudulent Preference

Meaning of Fraudulent Preference

The object of the law has always been to discourage debtors, on the eve of bankruptcy , from making a voluntary distribution of their assets in contravention of the provisions of bankruptcy laws providing for orderly distribution without any preference shown to one creditor as against the other . To constitute a fraudulent preference by an insolvent debtor , the preference must be an advantage actually given to one or more creditors over the others, with the knowledge of the debtor’s insolvency and intent to accomplish this end; and there must be guilty collusion . Bacon v Merchants’ Bank, 40 So. 413, 146 Ala. 521.

Related Entries of Fraudulent Preference in the Encyclopedia of Law Project

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Fraudulent Preference in Historical Law

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Legal Abbreviations and Acronyms

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