- J Briggs headstrong that until the occurrence of the insolvency event (that will be determined by the receivers under the terms of the financing documentation), the receivers will apply monies advent into their hands on a PAYG basis, by hireing the debts of cured creditors as and when they fall due.
- Insolvency event was defined as a inclination by the receivers that the friendship is, or is about to become, unable to pay its debts as they fall due [to certain senior creditors] as contemplated by section 123(1) of the Act. The parties agreed that the notes flow insolvency try in sub-paragraph (e) was germane(predicate) here.
- It subsequently became clear that the participation would non be able to pay its senior debts in full as they fell due merely by permit its own investments run to maturity and collecting the resulting cash. There would subscribe to to be a high level of discounted asset gross revenue in an uncertain market. This would deplete the companys balance sheet at the expense of late-maturing senior debts.
- The receivers therefore applied to court for helper as to whether, for the purposes of an insolvency event determination, they should have regard to senior debts travel due in the in store(predicate), in the cash flow insolvency test.
Held:
- Briggs held that cash flow insolvency should not be ascertained by a slavish focus on debts presently due. Future debts were relevant and to ignore them would be to adopt a blinkered approach.
- Briggs held that future debts do play a role in the commercial or cash flow insolvency test of s123(1)(e). A company is deemed unable to pay its debtsâ€" if it is proved to the satisfaction of the court that the company is unable to pay its debts as they fall due. The words as they fall due were regarded as words of futurity, and it was...If you want to drag a full essay, order it on our website: Orderessay
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