Company

What is insolvency?

BNY Corporate Trustee Services Ltd v Eurosail-UK 2007-3BL plc and others [2011] EWCA Civ 227; [2011] WLR (D) 73; TLR 14 March

The Court of Appeal rejected a submission that in deciding if a company was deemed to be insolvent, s123(2) of the Insolvency Act 1986 simply required the company’s assets and liabilities to be taken at their face amounts, which, unless good reason were shown to the contrary, were to be those in the company’s balance sheet and if the aggregate of the liabilities on the balance sheet exceeded the aggregate of the assets, then the company was insolvent.