Towards a Coherent Voidable Preference Regime for New Zealand

The presence of voidable preference provisions in bankruptcy and insolvency regimes is usually justified on the basis of one of several competing policy rationales: debtor deterrence, creditor deterrence, or pari passu equality. Yet policymakers often overlook the importance of wider policy objectives, such as promoting commercial certainty and enabling a distressed debtor to continue trading. Specifically, policymakers often fail to consider how these wider objectives should be traded off against the underlying policy rationales. In this paper, I argue that many of the current problems of the New Zealand preference regime stem from a lack of a clear, coherent underlying policy basis, and an inappropriate balance of the competing policies at stake. I offer insights into how policymakers should best address the difficult issue of creating a workable voidable preference regime, and suggest several much-needed reforms for improving the coherence of the policy underlying New Zealand's voidable preference regime.LL.M