Agriplant leased some equipment from Closed Asset Finance Ltd (CAF) for its agricultural and earth moving business.
It owed £20,000 to CAF, and the debt was guaranteed by Agriplant's majority shareholder, Mr George Sagar.
An accountant advised no payments should be made to any creditors, but when Agriplant got more money on one of its contracts, it paid off CAF.
The liquidators sought an order that Mr Sagar or CAF should repay the £20,000 sum.
Mr Sagar argued he had no desire to put himself or CAF in a better position before liquidation began.