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Twilight-zone treasury payments: BVI Court orders US$125.9 million clawback
In a recent decision of the BVI Court, a connected group company was ordered to repay US$125.9 million after a last-minute intra-group loan repayment was found to be an unfair preference.
In Almond v Linxens, the Court held that a payment by Tsinghua Unigroup International Co., Ltd (TUI) to Linxens, made two days before announcing a bond default, was designed to prefer an insider over the external bondholders. The decision confirms that intra-group treasury movements in the twilight zone will be judged by their commercial reality, not their characterisation as ordinary financing activity.
TUI…
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