Guaranteeing the debt of insolvent institutions and covering up the loss exposures this creates for a country's taxpayers is costly in three ways.
For much of the last fifty years the country's banks have operated as cashiers for often insolvent state enterprises, paying little attention to their ability to repay, and building up a mountain of bad debt.
In the former, the set-off was to be executed by a third party, with whom both the creditor and the insolvent debtor maintained their accounts.
The section applies only where the company has reached the position that there is no reasonable prospect that the company will avoid insolvent liquidation.
This is to prevent an insolvent from transferring assets to their spouses to avoid the consequences of sequestration.
When the property market went sour, the company's undertaking was sold by administrative receivers, and it went into insolvent liquidation in July 1993.
That's crucial: HITC is technically insolvent , and customers keep pulling funds.
The question is whether he knew or ought to have concluded at some time before the commencement of the winding up that there was no reasonable prospect that VKV would avoid going into insolvent liquidation.
After setting out the facts of the case before him, and the scheme for the payment of debts in an insolvent liquidation, the Vice-Chancellor said this.
Shortly thereafter, the defendant bank went into insolvent liquidation.