COMPANIES ACT 1963 - SECT 289 Other circumstances in which floating charge is invalid.
289.—(1) Subject to subsection (2), where—
( a ) a company is being wound up; and
( b ) the company was within 12 months before the commencement of the winding up indebted to any officer of the company; and
( c ) such indebtedness was discharged whether wholly or partly by the company or by any other person; and
( d ) the company created a floating charge on any of its assets or property within 12 months before the commencement of the winding up in favour of the officer to whom such company was indebted;
then (without prejudice to any rights or liabilities arising apart from this section) such charge shall be invalid to the extent of the repayment referred to in paragraph (c) unless it is proved that the company immediately after the creation of the charge was solvent.
(2) Subsection (1) shall not apply if the charge referred to in paragraph (d) was created before the operative date.
(3) In this section, "officer" includes the spouse, child or nominee of an officer.