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pref·er·ence /'pre-frəns, -fə-rəns/ n1: the right to prior payment of a debtwith preference over the creditors of the heirs or legatees — Louisiana Civil Code2: the transfer of an insolvent debtor's interest in property to a creditor for an earlier debt that gives the creditor more than the creditor would otherwise receive (as under a bankruptcy settlement) – called also voidable preference; compare antecedent debt at debt, fraudulent conveyance; general assignment at assignment◇ Preferences can be voided by a bankruptcy trustee because they diminish the bankruptcy estate out of which other creditors will be paid. Preferences must be made during a period (as 90 days before the date of filing a bankruptcy petition) established by bankruptcy law in order to be voidable. Perfection or grant of a security interest during this period is also a preference. The bankruptcy law states exceptions under which payments to creditors are not voidable preferences.3: priority
Merriam-Webster’s Dictionary of Law. Merriam-Webster. 1996.
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I
(choice) noun
bias, discretion, disposition, election, fancy, favorite, inclination, leaning, liking, option, partiality, preconceived liking, predilection, prejudice, proclivity, proneness, propensity, selection
associated concepts: preferred risk
II
(priority) noun
advancement, advantage, benefit, favored treatment, front position, praepositio, precedence, preeminence, preferment, preferred standing, seniority
associated concepts: calendar preference, fraudulent conveyances, fraudulent preference, preferred stock, unlawful preference, voidable preference
foreign phrases:
- Qui prior est tempore potior est jure. — He who is first in time is first in right.- Prior tempore potior jure. — First in time, superior in rightIII index advantage, bias, choice (decision), conatus, discrimination (bigotry), disposition (inclination), election (choice), favor (partiality), favoritism, inclination, inequity, option (choice), partiality, patronage (power to appoint jobs), penchant, poll (casting of votes), position (point of view), precedence, predilection, predisposition, prejudice (preconception), prerogative, primary, priority, propensity, referendum, selection (choice), volition, vote, will (desire)
Burton's Legal Thesaurus. William C. Burton. 2006
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Under section 239 of the Insolvency Act 1986, a preference arises where within six months (or two years where the creditor is a connected person) of an insolvent liquidation one or more of the company's creditors has been put in a better position than he would have been in as a result of the insolvency. In simple terms, this means that the company has chosen to pay a creditor to avoid him losing out as an unsecured creditor in the insolvency. In such cases the liquidator or receiver may set it aside where a desire to give a preference is demonstrated - this is assumed in the case of a connected person.
Easyform Glossary of Law Terms. — UK law terms.
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n.(1) Favor shown to one person above others.(2) Placing one creditor in front of others; paying one creditor to the exclusion of or harm to other creditors.
The Essential Law Dictionary. — Sphinx Publishing, An imprint of Sourcebooks, Inc. Amy Hackney Blackwell. 2008.
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In bankruptcy, a debtor's payment to a creditor within a defined period of time before filing for bankruptcy — three months for regular commercial creditors and one year for insider creditors, such as friends, family members, and business associates. Because a preference gives that creditor an edge over other creditors in the bankruptcy case, the bankruptcy trustee can get the preference back and distribute it among all of the creditors.Category: Bankruptcy, Foreclosure & Debt → Bankruptcy
Nolo’s Plain-English Law Dictionary. Gerald N. Hill, Kathleen Thompson Hill. 2009.
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Where a company does something or allows something to be done which puts a creditor, surety or guarantor in a better position than it would otherwise have been in if the company went into insolvent liquidation.An administrator or liquidator may apply to the court for an order avoiding any action taken by the company within six months (two years if the person receiving the preference is connected with the company) before the company went into administration or liquidation which has placed a creditor or a surety for the company's debts in a better position than he would have been in an insolvent liquidation, if the company was influenced by a desire to produce that result and provided that, at the time or as a result of the preference, the company was unable to pay its debts (section 239, Insolvency Act 1986).For further information, see the Insolvency Service website: .Related links+ preferenceUSApreference, Also known as a preferential transfer.A transfer made by an insolvent debtor to a creditor in payment of a preexisting debt within 90 days before the date when the bankruptcy petition is filed (or if the creditor is an insider, within one year of the filing) that allows the benefiting creditor to receive more than it would have otherwise received in a Chapter 7 liquidation. The debtor is presumed insolvent on and during the 90 days immediately preceding the date of the filing of the petition. Such transfers may be recovered by the debtor-in-possession or the Chapter 11 trustee for the benefit of all creditors, helping to ensure an equality of distribution among creditors of the same class.For further information, see Practice Note, Preferential Transfers: Overview and Strategies for Lenders and Other Creditors (www.practicallaw.com/6-381-6416).
Practical Law Dictionary. Glossary of UK, US and international legal terms. www.practicallaw.com. 2010.
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n. A debtor's transferring of property to a creditor in advance of filing a bankruptcy petition, so that the creditor receives more than would have been received under bankruptcy, to the detriment of other creditors.
Webster's New World Law Dictionary. Susan Ellis Wild. 2000.
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The act of an insolvent debtor who pays one or more creditors the full amount of their claims or a larger amount than they would be entitled to receive on a pro rata distribution.
Dictionary from West's Encyclopedia of American Law. 2005.
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The act of an insolvent debtor who pays one or more creditors the full amount of their claims or a larger amount than they would be entitled to receive on a pro rata distribution.
Short Dictionary of (mostly American) Legal Terms and Abbreviations.
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n.in bankruptcy, the payment of a debt to one creditor rather than dividing the assets equally among all those to whom he/she/it owes money, often by making a payment to a favored creditor just before filing a petition to be declared bankrupt. Such a preference is prohibited by law, and the favored creditor must pay the money to the bankruptcy trustee. However, the bankruptcy court may give secured creditors (with a judgment, lien, deed of trust, mortgage or collateralized loan) a legal preference over "general" creditors in distributing available funds or assets.See also: bankruptcy
Law dictionary. EdwART. 2013.
