Since 1962

Keith,in your professional opinion, does it look as if we are trading whilst insolvent?

One of the definitions of insolvent trading is the inability of a company to meet its liabilities when they fall due.

Keith,in your professional opinion, does it look as if we are trading whilst insolvent?

Yes.

I think even Stevie Wonder could see that we have been trading whilst insolvent for many years.

But actually , it is not an offence to do so. The offence is to do so without good reason for believing that continuing to trade will result in a better payback fror creditors that they would get by just stopping.

So the directors have to produce EVIDENCE that it was reasonable to believe that future trading would be at a profit , that assets could be sold at a profit to pay down some of the debt , that new investors would put fresh cash in etc.It is not enough for directors to just carry on in some vain hope that these things would happen , they have to show what evidence they had to support their view.