Kerr in His Capacity as trustee of the Bankrupt Estate of Cross v Akcan

This matter concerned an application by the trustee of the bankrupt estate of Cross, Mr Kerr, against Akcan. The trustee sought to recover funds transferred by Mr Cross to Akcan prior to Mr Cross's bankruptcy. The application was heard in the Federal Court of Australia.

The primary legal issue before the Court was whether the transfers of funds from Mr Cross to Akcan constituted voidable transactions under section 120 of the *Bankruptcy Act 1966* (Cth). Specifically, the Court had to determine if the transfers were made for less than the reasonably equivalent value, and if Mr Cross was insolvent at the time of the transfers or became insolvent as a result of them.

Judge Driver found that the transfers were indeed voidable preferences. The Court was satisfied that Mr Cross did not receive reasonably equivalent value for the significant sums transferred to Akcan. Furthermore, evidence presented indicated that Mr Cross was insolvent at the time of these transfers, or that the transfers themselves rendered him insolvent. The Court applied the principles established in bankruptcy law concerning the avoidance of transactions that deplete a bankrupt's estate to the detriment of creditors.

Consequently, the Court ordered that the funds transferred by Mr Cross to Akcan be repaid to the trustee of Mr Cross's bankrupt estate.