Purchase acquired a target company from the vendor.
Vendor assigned purchaser the benefit of an on-demand loan due from the target company; purchaser agreed to pay vendor for the assignment of loan.
Purchaser was later unable to make payment to the vendor, so agreement was later restructured – target was made to make payments directly to the vendor, and this was set-off against the money still owed to the vendor by the purchaser under the loan assignment.
Was argued that set-off of money owed by purchase was unlawful financial assistance.
Was no financial assistance
For there to be financial assistance, something has to be given to someone that he does not have already
Here, purchaser had not been given any new rights against target company, rather, it had already acquired the right to a loan payable by target company
Had purchaser wished to use this to pay off the vendor for the loan assignment, could have simply demanded payment in full at any time
By making loan payable to vendor and setting this money off against money due to vendor under loan assignment, was simply short-circuiting the process
Thus purchaser was simply exercising a pre-existing legal right - this cannot constitute financial assistance
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