Solvent or insolvent: the Supreme Court lays down the test for s123 of IA 1986 – 11 Stone Buildings

“In a unanimous judgment handed down on 9th May 2013, the Supreme Court confirmed that the ‘balance
sheet’ test insolvency in section 123 of the Insolvency Act 1986 is not a mechanical exercise of comparing the value of a company’s assets against the value of its liabilities; but a more sophisticated test requiring a judgment as to whether the present assets of a company will reasonably enable the company’s present and future liabilities to be met. In so doing, their Lordships rejected the ‘point of no return’ test formulated by Lord Neuberger MR in the Court of Appeal. Christopher Boardman reviews BNY Corporate Trustee Services Ltd v Eurosail-UK 2007-3BL Plc.”

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11 Stone Buildings, 13th May 2013