Totally agree Giles. Not sure how the bankruptcy laws work in the UK but in some jurisdictions a creditor who is paid before the bankruptcy may be considered unfairly favoured and may have to refund the payment to eventually be re-divided amongst all the creditors, that is if anything is left after the fees and expenses of the "Official Receiver".
Payments made to directors and managers should be treated the same way. It can be hard to prove but in Australia it is an offense to trade whilst knowingly insolvent.
It's the same over here as well but the problem is the definition of 'insolvent'. A company can be massively in debt making huge losses but if it can still pay its creditors when they are due through financing (drawing down loans on the debtor book) loans on assets or investor cash, it isn't technically insolvent.
Thats the biggest problem with loss making businesses. There are too many ways to keep them going long after there is any chance of recovery
