ABSTRACT
This chapter is addressed to a single issue in what circumstances may a bank advancing money to a company which goes into insolvent liquidation risk a claim by the liquidator as the result of its actions prior to winding up. Where the bank has agreed to advance money to the company and fails to do so in accordance with that agreement the consequences for the company can be serious. A bank owes its customer a duty to exercise reasonable care and skill in the provision of its services and the execution of its instructions. The Insolvency Act 1986 prescribes various grounds on which payments and transfers by a company prior to liquidation may be attacked and gives the court power to make such orders as it thinks fit for restoring the position to what it would have been if the company had not entered into the transaction.
