Again, the most important thing that is visible is that matching payments most likely become countervailable preferences if the defendant filing for bankruptcy within 90 days of payment. The simplest protection against this risk is that the applicant feeds the payment as quickly as possible in order to allow the preferential period of 90 days to run. If the complainant can do this until day 91, the risk will disappear. The sooner time begins to run, the sooner the complainant will reach his refuge. The risks to comparisons of the potential for future bankruptcy are manifold. The possibility of recovering agreed payments over time is threatened. The risks of preferential exposure, the financial consequences of losing the ability to assert the initial amount of debt, and debt relief that would otherwise not be excusable are less obvious to those who do not focus on the prospect of bankruptcy. Although there is no transaction agreement that is immune to insolvency, these risks can be significantly reduced and managed by awareness of the insolvency factor and proper structuring of the comparison. The court considered whether the agreement was void, whether it was, whether the court should validate it and, if valid, which claims against the defendant were excluded.

After reviewing the terms of the agreement, the judge concluded that the claims of the liquidators of the company were in no way excluded by the agreement. Since many defendants will be reluctant to admit their non-apology, a more practical approach is to structure the agreement in such a way that the issue of non-excuse is expressly preserved if the applicant does not receive or retain the economic benefit of paying for the settlement. The agreement should expressly stipulate that it is not a question of creating a new obligation and that the applicant retains his right to assert the non-excusable nature of the debt. This may be done in conjunction with the maintenance of the initial amount of duty. In a recent case, the National Company Law Tribunal (NCLT), New Delhi, in M/s Brand Reality Services Ltd. v.M/s Sir John Bakeries India Pvt. Ltd1, found that an operational debt under the Insolvency and Bankruptcy Act 2016[2] (« the Code ») does not take into account unpaid payments under the settlement agreement and that if the relationship between the parties to the dispute is not on the part of a business debtor and an operational creditor, those other defaults would not fall within the scope of the Insolvency and Bankruptcy (Code) Regulations 2016. The simplest way to deal with this risk is for the settlement agreement to explicitly state the reasons for paying the debt, which puts pressure on the debtor to challenge those grounds. Instead of clarifying that debt is not affordable, the real reasons for the indefensibleness should be indicated in accordance with the language of the current legal exception to debt relief. This type of non-discharge is generally appreciated. But see in re Huang, 275 F.3d 1173 (9th cir.

2001) (non-unloading agreement inapplicable alone). A transaction with a payment inherently carries the risk that the payment received by the applicant will be questionable as a preference if the defendant files for bankruptcy within 90 days of payment. . . .