In re PSD Enterprises Ltd. v [1998] JLR 321 (24 September 1998)

In re PSD Enterprises Ltd. v [1998] JLR 321 (24 September 1998)

The court held that the 'cash flow' test of insolvency applies under art. 17, and it is permissible to consider the debtor's balance sheet as evidence of cash flow. Insolvency may be inferred if the debtor was insolvent before or after the relevant time.

Citation
[1998] JLR 321
Parties
Debtor: PSD Enterprises Ltd.
Jurisdiction
Jersey
Judgment Date
24 September 1998
Procedural Posture
Bankruptcy / Application for Order Under Bankruptcy (desastre) (jersey) Law 1990, Art. 17
Outcome
Order may only be made if debtor unable to pay debts as they fall due; cash flow test applies.
Legal Topics
Preferences, Test of Insolvency, Desastre Proceedings
Insolvency Bankruptcy Preferences Test of Insolvency Desastre Proceedings

Case Brief

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Parties

PSD Enterprises Ltd.

Debtor

Procedural Posture

Bankruptcy / Application for Order Under Bankruptcy (desastre) (jersey) Law 1990, Art. 17

Legal Issues

  1. 1 Whether the court may make an order under art. 17 in relation to a preference given by a debtor if the debtor is unable to pay debts as they fall due
  2. 2 Whether the 'cash flow' test of insolvency applies under the Bankruptcy (Desastre) (Jersey) Law 1990

Ratio Decidendi

The court held that the 'cash flow' test of insolvency applies under art. 17, and it is permissible to consider the debtor's balance sheet as evidence of cash flow. Insolvency may be inferred if the debtor was insolvent before or after the relevant time.

Court Disposition

Order may only be made if debtor unable to pay debts as they fall due; cash flow test applies.