The court was asked as to the treatment of the assets of the company in case of a future insolvency.
Held: Briggs J decided section 123(1)(e) required: ‘In my judgment, the effect of the alterations to the insolvency test made in 1985 and now found in section 123 of the 1986 Act was to replace in the commercial solvency test now in section 123(1)(e), one futurity requirement, namely to include contingent and prospective liabilities, with another more flexible and fact sensitive requirement encapsulated in the new phrase ‘as they fall due.”
The Byblos Bank case was a case about ability to pay debts as they became due, but the Court of Appeal had recognised that balance-sheet insolvency is not irrelevant to that issue.
Briggs J
[2007] EWHC 2402 (Ch), [2008] BCC 182, [2008] 1 BCLC 741, [2008] Bus LR 1562, [2008] 2 All ER 987
Bailii
Insolvency Act 1986 123
England and Wales
Citing:
See Also – In re Cheyne Finance Plc ChD 12-Sep-2007
The Receivers sought directions as to how to apply monies coming into their hands on the basis that, on advice, they considered that they needed the Court’s answer to an underlying difficult issue of the construction of the Security Trust Deed. The . .
Cited – Byblos Bank SAL v Al-Khudhairy CA 1987
The parties disputed the validity of the appointment of a receiver. The ostensible ground for appointment of the receiver was not made out, but the bank relied on a new ground, section 223(d) of the 1948 Act. Nicholls LJ observed: ‘Construing this . .
Cited by:
Approved – BNY Corporate Trustee Services Ltd and Others v Neuberger SC 9-May-2013
Potential Insolvency effect under guarantee
The various parties had entered into complex and substantial financial arrangements incorporating guarantees. The guarantees were conditional upon the guaranteed party being solvent. The parties disputed whether a party which would otherwise be . .
Lists of cited by and citing cases may be incomplete.
Insolvency
Updated: 10 December 2021; Ref: scu.264448