Timberworld Ltd v Levin was a landmark legal decision concerning whether the peak indebtedness rule operated in New Zealand.

With a transaction of this type the liquidator will only be entitled to claim the net difference of payments made and goods and services received from a creditor, where there is an ongoing business relationship with the debtor company.

"[4] As Justice Stevens summarised of the decision's importance, "Naturally liquidators will wish to use the point where the indebtedness of the company is at its highest.

Despite each creditor advancing the same value of goods to Company X and receiving the same payments in return, the peak indebtedness rule can operate to produce vastly different outcomes, merely on the basis of the particular credit arrangements in each case.

[7]Justice Stevens also noted that, The legislature did not see fit to address the peak indebtedness rule, or to include it in the wording of s 292(4B).

Parliament took the decision to set aside a particular group of creditors who continue to provide credit and goods on the assumption of future trade.