Cash flow is king in an insolvent trust says Jersey Royal Court
Published: 27 Nov 2015
Article first published by Appleby as an eAlert in November 2015
In a recent judgement re the Z Trusts  JRC196C from the Royal Court of Jersey it was held that the test for an insolvent trust is a cash flow test, rather than a balance sheet test. Once an insolvency, or probable insolvency, arises, the trustee or other persons holding fiduciary powers can only exercise those powers in the interests of the creditors. This is a significant case as there is little authority on insolvent trusts.