Financial Directive Cases

- Chyne Finance plc was a structured investment vehicle with investments in mortgage-backed securities. Due to the credit crunch in 2007, it went into run-off and went into receivership - 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 approach into their hands on a PAYG basis, by hireing the debts of cured creditors as and when they fall referable. - Insolvency event was defined as a inclination by the receivers that the friendship is, or is about to become, unable to catch up with its debts as they fall due [to certain aged(a) creditors] as contemplated by section 123(1) of the Act. The parties agreed that the nones flow insolvency try in sub-paragraph (e) was germane(predicate) here. - It later on became clear that the participation would non be able to stand its senior debts in all-embracing as they fell due unless by permit its own investments run to maturity and roll up the resulting money. There would subscribe to to be a high direct of discounted asset gross revenue in an uncertain market. This would polish off the companys balance sheet at the expense of late-maturing senior debts.

- The receivers then applied to court for helper as to whether, for the purposes of an insolvency event determination, they should earn 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 reduce on debts prese ntly due. Future debts were relevant and to ! ignore them would be to adopt a blinkered approach. - Briggs held that future debts do hearten a role in the commercial or cash flow insolvency test of s123(1)(e). A company is deemed unable to pay its debts 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: BestEssayCheap.com

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