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 opinionated 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 approaching into their hands on a PAYG basis, by hireing the debts of cured creditors as and when they fall ascribable. - Insolvency event was defined as a inclination by the receivers that the friendship is, or is about to become, unable to stand its debts as they fall due [to certain elderly creditors] as contemplated by section 123(1) of the Act. The parties agreed that the notes flow insolvency try in sub-paragraph (e) was germane(predicate) here. - It afterwards became clear that the participation would non be able to constitute its senior debts in practiced as they fell due only when by permit its own investments run to maturity and hoard the resulting silver. There would subscribe to to be a high train of discounted asset gross revenue in an uncertain market. This would down the companys balance sheet at the expense of late-maturing senior debts.

- The receivers because applied to court for helper as to whether, for the purposes of an insolvency event determination, they should view as 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 slavi sh focalization on debts presently due. Fut! ure debts were relevant and to ignore them would be to adopt a blinkered approach. - Briggs held that future debts do escape 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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