Apart from floating charges, a second and general ground for avoiding preferences is found under section 239. This

Apart from floating charges, a second and general ground for avoiding preferences is found under section 239. This avoids preferences that entail a "desire to prefer" one creditor over another. This test is hard to fulfil. In Re MC Bacon Ltd, a company gave a floating charge to Natwest bank in return for a continued overdraft as its business declined. Millett J held the company had not desired to prefer the bank. It had no special affection for its bank, and only agreed to the charge to prolong survival of the business.[169] By contrast, in Re Agriplant Services Ltd[170] Jonathan Parker J held it was an unlawful preference for Agriplant to pay £20,000 due on a leasing contract for earth moving equipment to a company. This was mainly because Agriplant's major shareholder Mr Sagar, had guaranteed that Agriplant's liability, and so repayment absolved Mr Sagar's liabilities above other creditors. Third and finally, CA 2006 section 874 stipulates that any charge, including a floating charge, that is not registered is considered void. This simple provision encourages a transparency of security interests, at least if creditors are in a position to check the register.
Directors' duties