insolvency law. A statute that provides relief to a debtor who lacks the means to pay creditors. • The term is sometimes used interchangeably with bankruptcy law because legislative drafting may not produce a bright-line distinction. — Also termed insolvent law. Cf. BANKRUPTCY LAW(2).
Scots law. A bankruptcy; the stage of insolvency in which the debtor has publicly acknowledged insolvency under the statute. • This stage is usu. followed by sequestration, which is notorious insolvency coupled with the appointment of a trustee for creditors. — Also termed notour bankruptcy.
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Insolvency created when the debtor cannot meet its obligations as they fall due. • Under most state laws, equity insolvency prevents a corporation from making a distribution to its shareholders.
notorious insolvency. Scots law. A bankruptcy; the stage of insolvency in which the debtor has publicly acknowledged insolvency under the statute. • This stage is usu. followed by sequestration, which is notorious insolvency coupled with the appointment of a trustee for creditors. — Also termed notour bankruptcy. “Bankruptcy, according to the law of Scotland, is
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Insolvency created when the debtor’s liabilities exceed its assets. • Under some state laws, balance-sheet insolvency prevents a corporation from making a distribution to its shareholders. — Also termed balance-sheet test.
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bankruptcy law. 1. INSOLVENCY LAW. 2. Traditionally, a statute that provides some relief and protection to an insolvent debtor or to the debtor’s creditors. Cf. INSOLVENCY LAW. 3. BANKRUPTCY(2).
insolvency, n. 1. The condition of being unable to pay debts as they fall due or in the usual course of business. 2. The inability to pay debts as they mature. — Also termed failure to meet obligations; failing circumstances. See BANKRUPTCY(2). Cf. SOLVENCY. balance-sheet insolvency. Insolvency created when the debtor’s liabilities exceed its assets.
revocatory action (rev-[schwa]-k[schwa]-tor-ee or ri-vok-[schwa]-tor-ee).Civil law. An action brought by a creditor to annul a contract that has been entered into by the debtor and that will increase the debtor’s insolvency. La. Civ. Code art. 2036. [Cases: Fraudulent Conveyances 205–328.]