Transactions that can be avoided due to their occurring within 2 years before liquidation or administration are known as what?

The correct answer is preferences. This term refers to transactions made by an insolvent company that favor certain creditors over others within a specified time before liquidation or administration. When a company is facing insolvency and subsequently enters liquidation or administration, transactions that occurred during the two years leading up to these events can be scrutinized. If a transaction is identified as a preference, it can be set aside, meaning the company can reclaim the assets or funds that were transferred to benefit specific creditors. This rule is designed to ensure that all creditors are treated fairly in the event of insolvency, preventing any actions that unjustly favor one creditor over another right before the insolvency process begins.

Transactions at undervalue pertain to situations where an asset is sold for less than its true value, which may also be voidable under specific circumstances but do not specifically address the preference aspect in insolvency situations. Fraudulent transfers are typically transfers made with the intent to defraud creditors, which may occur outside of the two-year preference period. Insolvent transfers encompass a broader category and include any transfers made when a debtor is unable to pay debts, but preferences are specifically focused on those transactions that benefit certain creditors over others during the critical pre-insolvency period.