Skip to main content

Legal Update

Balance sheet insolvency test clarified

March 2011
Mayer Brown Legal Update
The Court of Appeal has allowed companies around the country to breathe a solvent sigh of relief, as it has held that the so-called "balance sheet" test of insolvency in s123(2) Insolvency Act 1996 is intended to apply where a company has reached a "point of no return" rather than being used as a "mechanistic, even artificial, reason for permitting a creditor to present a petition to wind up a company".


  • Devi Shah
    T +44 20 3130 3669
  • Ian McDonald
    T +44 20 3130 3856
  • Jessica Walker
    T +44 20 3130 3437
The Build a Report feature requires the use of cookies to function properly. Cookies are small text files that are placed on your computer by websites that you visit. They are widely used in order to make websites work, or work more efficiently. If you do not accept cookies, this function will not work. For more information please see our Privacy Policy

You have no pages selected. Please select pages to email then resubmit.