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Insolvency
Insolvency exists for a person or organization when total financial liabilities exceed total financial assets. A related financial condition, sometimes referred to as cash-flow insolvency, exists when a person or organization can not meet its financial obligations as they come due. In business situations, accountants in the US refer to this as a working capital deficit.
Insolvency is not a synonym for bankruptcy, which in the US is a determination of insolvency made by a court of law with resulting legal orders intended to resolve the insolvency.
In some jurisdictions, it is an offence under the insolvency laws for a corporation to continue in business while insolvent, though in others the business may continue under a declared protective arrangement while alternative options to achieve recovery are worked out.[citation needed] Increasingly, legislatures have favoured alternatives to winding up companies for good.[citation needed]
It can be grounds for a civil action, or even an offence, to continue to pay some creditors in preference to other creditors once a state of insolvency is reached.[citation needed]
Insolvency law reform: corporate insolvency information for directors, employees, creditors and shareholders
Insolvency law changed on 31 December 2007 as a result of the Corporations Amendment (Insolvency) Act 2007. The ATO and ASIC have issued information sheets relevant to the changes...
S20,000 for Insolvency Research
The Canadian Insolvency Foundation invites applications for the fourth annual Lloyd Houlden Research Fellowship. The $20,000 Houlden Fellowship will be awarded for a paper that addresses current issues in Canadian insolvency policy and practice...
Delay on new Insolvency Rules
The Insolvency Service have said the timetable for introducing new Insolvency Rules that update the 1986 ones has slipped back to 1 October 2009...
Insolvency set-off - building societies
The Financial Markets Law Committee have published their December 2007 paper proposing that the mandatory insolvency set-off rule should be applied to building societies and incorporated friendly societies...
Deepening Insolvency Trends
I have written about the waning popularity of deepening insolvency (and here) as a cause of action. Bob Eisenbach refers to a new article by his colleagues in the Bankruptcy & Restructuring group at Cooley Godward Kronish LLP, Michael Klein and Ronald Sussman...
ASIC insolvency report
ASIC has released a report (pdf) covering information gathered from corporate insolvencies between 2004 and 2007. In profiling insolvent companies the report notes that 82% of insolvencies were companies with less than 20 employees...
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