Page 26 - PWM2024_JULY-AUGUST EBOOK

TECHNOLOGY REPORT

Navigating choppy waters

ometimes they fail – Gemini Print in sheet surplus may nonetheless be cashflow insolvent if its
Shoreham-by-Sea being an example – and can- assets are illiquid, and a company that currently has suffi-
not be resurrected, with their assets sold off to cient cash to pay its debts when due may be balance sheet
Folio Print Finishing, repay creditors. Others, such as Folio, fail but insolvent on a longer term view.”
Gemini Print and re-emerge, almost immediately, in another Paul Taylor, a partner in the corporate department of
Severn Print. Just S guise, preserving the jobs of employees. Pre- Fox Williams, adds more flesh to the bone. He explains
that while the technical wording of insolvency is set out
three of a number of packs are, however, often controversial. in the Insolvency Act 1985, a company will also “be
print firms that have In such sad situations there are always losers and a bit- deemed to be unable to pay its debts by a court if it fails to
regrettably failed for ter taste left in the mouth. For directors, such situations comply with a statutory demand, or satisfy enforcement
mean particularly choppy waters to navigate.
one reason or of a court judgement debt awarded against it”.
another. Definition of insolvency And Adrian Furniss, senior insolvency administrator at
BRI, echoes the same, referring specifically to Section 123
Jamie Leader, a partner and head of Insolvency and of The Insolvency Act. He says that the act makes no dis-
Words by Restructuring Disputes at Enyo Law, thinks that it’s tinction between ‘inadvertent’, ‘technical’ or ‘actual’
Adam Bernstein important to understand what insolvency really means. insolvency. Those terms “do not form part of the criteria
He explains that there are two forms of insolvency rec-
used by an insolvency practitioner when assessing a com-
ognised by English law: an inability to pay debts when pany’s predicament.” As a result, it doesn’t matter what
they fall due, often referred to as cashflow insolvency, and the reason, a company either is or is not solvent.
an excess of total liabilities over total assets, referred to as Interestingly, Taylor adds that the definition of insol-
balance sheet insolvency. vency is also relevant to certain company procedures,
As he points out: “A company is technically insolvent if such as reductions of capital, which require directors to
it meets either test. So, a company which has a balance make statements of solvency.

26 PrintWeek MENA July-August 2024 www.printweekmena.com