UK Supreme Court considers the 'balance sheet insolvency test'

The UK Supreme Court has recently considered section 123(2) of the Insolvency Act 1986, which is often referred to as the 'balance sheet insolvency test'.

This briefing sets out the key features of the judgment, including the guidance provided by the Supreme Court in relation to the application of the test. As well as being a ground for placing a company into administration or liquidation, the test is often incorporated into commercial agreements and financing documents and so the judgment has attracted widespread interest.