In summary, it is possible for the grant of security to be set aside as a preference. The position is less straightforward, however, in respect of applications to set aside the grant of security as a transaction at an undervalue. Preferences A transaction entered into with a creditor of the insolvent company or bankrupt can be set aside as a preference (under ss 239 and 340 Insolvency Act 1986 (IA 1986) respectively) where: • the company or individual gave a preference in fact to the creditor by doing something (or permitting something to be done) with the effect of putting that creditor into a position which, in the event of the company or individual entering liquidation or bankruptcy, would be better than if the act had not been done (IA 1986, ss 239(4) and 340(3)) • the company or individual was influenced by a desire to prefer the creditor (IA 1986, ss 239(5) and 340(4)), and • the preference was given at