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When will an informal source of funds be sufficient to prove a company’s solvency? - 17th Jun 2014

When will an informal source of funds be sufficient to prove a company’s solvency? Australia
June 13 2014

In a recent decision the Supreme Court of Queensland considered the solvency of a company with no assets or formalised line of credit, but with a director who claimed to be willing to fund the $2.5 million that the company had committed to spending. This decision makes it clear that while the court will look behind a company’s legal rights and obligations in determining solvency, the key question is whether there is a sufficient likelihood that the company will be able to rely on those funds being available when incurring the debts. Read the article here.

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