Balance sheet insolvency: Difference between revisions

In {{casenote|BNY Corporate Trustees|Eurosail}} the Supreme Court noted that while this test this is often called “[[balance sheet insolvency]]” it can’t be satisfied purely by reference to the company's statutory balance sheet, because that may omit important information like [[contingent liability|contingent liabilities]]. Nor does it mean that the company has “reached the point of no return because of an incurable deficiency of assets”, which was what the Court of Appeal in this case had hypothesised.  

The court decided that for “the value of the company’s assets to be less than the amount of its liabilities, taking into account its [[contingent liability|contingent]] and prospective liabilities” the court must be satisfied, on the [[balance of probabilities]], that the company has insufficient assets to be able to meet all its liabilities including prospective and contingent liabilities ''(I know what you’re thinking by the way — the highest court in the land isn’t adding a whole lot of value at this point is it?)'' discounted for contingencies and deferment.