Insolvent definition: Copy, customize, and use instantly
Introduction
The term "Insolvent" refers to the financial state of an individual or entity that is unable to meet its financial obligations as they become due, or whose liabilities exceed their assets. It is essential in legal, financial, and contractual contexts to define when insolvency occurs and its implications for agreements, obligations, and remedies.
Below are various examples of how "Insolvent" can be defined in different contexts. Copy the one that fits your needs, customize it, and use it in your contract.
Definition of "Insolvent" as the inability to pay debts
This definition ties "Insolvent" to non-payment.
"Insolvent" means the condition of being unable to pay debts as they become due in the ordinary course of business or operations.
Definition of "Insolvent" as exceeding liabilities over assets
This definition connects "Insolvent" to financial imbalance.
"Insolvent" refers to the financial state in which an individual’s or entity’s total liabilities exceed the fair market value of their total assets.
Definition of "Insolvent" as defined under bankruptcy laws
This definition links "Insolvent" to legal thresholds.
"Insolvent" means the condition of an individual or entity as defined under applicable bankruptcy or insolvency laws, including the inability to satisfy monetary obligations.
Definition of "Insolvent" as determined by a court or regulator
This definition applies "Insolvent" to formal declarations.
"Insolvent" refers to the status of an individual or entity formally determined to be unable to meet financial obligations, as declared by a court or regulatory authority.
Definition of "Insolvent" as applicable to business cessation
This definition ties "Insolvent" to operational impact.
"Insolvent" means the financial state of an entity that has ceased normal business operations due to its inability to pay debts or meet financial commitments.
Definition of "Insolvent" as related to cash flow insolvency
This definition connects "Insolvent" to liquidity issues.
"Insolvent" refers to a situation where an individual or entity lacks sufficient cash or liquid assets to pay debts as they fall due.
Definition of "Insolvent" as related to balance sheet insolvency
This definition links "Insolvent" to financial statements.
"Insolvent" means the financial condition of an individual or entity whose liabilities exceed their assets on their balance sheet, indicating a negative net worth.
Definition of "Insolvent" as defined in contractual terms
This definition applies "Insolvent" to specific agreements.
"Insolvent" refers to the financial condition described in this agreement, including any inability to pay debts, the filing of a bankruptcy petition, or assignment for the benefit of creditors.
Definition of "Insolvent" as determined by external auditors
This definition ties "Insolvent" to financial assessments.
"Insolvent" means the status determined by an independent financial auditor based on the inability of the entity to meet its financial obligations.
Definition of "Insolvent" as relevant to secured creditors
This definition connects "Insolvent" to creditor rights.
"Insolvent" refers to the financial condition where an entity is unable to satisfy the claims of secured creditors, including repayment of secured debts.
Definition of "Insolvent" as a trigger for contract termination
This definition links "Insolvent" to contractual remedies.
"Insolvent" means the financial state of a party that serves as a trigger for termination or modification of this agreement under its terms.
Definition of "Insolvent" as related to financial restructuring
This definition applies "Insolvent" to reorganization efforts.
"Insolvent" refers to the financial status of an entity that requires restructuring or reorganization under applicable insolvency or bankruptcy laws.
Definition of "Insolvent" as involving liquidation proceedings
This definition ties "Insolvent" to asset liquidation.
"Insolvent" means the financial state of an entity that is undergoing liquidation proceedings to satisfy debts and obligations to creditors.
Definition of "Insolvent" as related to a notice of default
This definition connects "Insolvent" to formal notices.
"Insolvent" refers to the financial condition of a party that has received a notice of default due to non-payment or inability to fulfill financial obligations.
Definition of "Insolvent" as defined by applicable jurisdiction
This definition links "Insolvent" to local laws.
"Insolvent" means the condition of being financially distressed, as defined by the laws of the applicable jurisdiction governing this agreement.
Definition of "Insolvent" as related to failed debt obligations
This definition ties "Insolvent" to unfulfilled commitments.
"Insolvent" means the financial state of an individual or entity that has failed to meet its debt obligations by the due date, despite creditor demands.
Definition of "Insolvent" as a status under corporate law
This definition connects "Insolvent" to company regulations.
"Insolvent" refers to the financial condition of a corporation that is unable to continue operations due to an inability to meet liabilities under applicable corporate law.
Definition of "Insolvent" as triggered by credit rating downgrades
This definition links "Insolvent" to creditworthiness.
"Insolvent" means the financial state of an entity that has experienced a significant credit rating downgrade, indicating an inability to meet future financial obligations.
Definition of "Insolvent" as associated with a breach of financial covenants
This definition applies "Insolvent" to contractual breaches.
"Insolvent" refers to the financial condition arising from the breach of financial covenants or terms set forth in an agreement, leading to a default or legal action.
Definition of "Insolvent" as determined by an insolvency practitioner
This definition ties "Insolvent" to professional assessments.
"Insolvent" means the status of an entity as determined by an insolvency practitioner, administrator, or trustee appointed under applicable laws.
Definition of "Insolvent" as related to ongoing litigation
This definition connects "Insolvent" to legal disputes.
"Insolvent" refers to the financial state of an entity that is unable to meet liabilities due to the impact of ongoing litigation or judgments against it.
Definition of "Insolvent" as defined in cross-border insolvency agreements
This definition links "Insolvent" to international contexts.
"Insolvent" means the condition of financial distress recognized in cross-border insolvency proceedings under international agreements or treaties.
Definition of "Insolvent" as related to voluntary declarations
This definition applies "Insolvent" to self-declared status.
"Insolvent" refers to an individual or entity that has voluntarily declared insolvency by filing for bankruptcy or initiating debt restructuring under applicable laws.
Definition of "Insolvent" as identified by cash flow deficiencies
This definition ties "Insolvent" to operational failures.
"Insolvent" means the financial condition where cash flow is insufficient to cover operational expenses, payroll, or other immediate obligations.
Definition of "Insolvent" as triggered by failed debt restructuring
This definition connects "Insolvent" to reorganization attempts.
"Insolvent" refers to the financial state of an entity that has failed to successfully complete a debt restructuring plan, resulting in continued inability to pay creditors.
Definition of "Insolvent" as applicable to partnerships
This definition links "Insolvent" to joint ventures.
"Insolvent" means the financial state of a partnership in which the joint assets are insufficient to satisfy the collective liabilities of the partners.
Definition of "Insolvent" as a condition for appointing a receiver
This definition applies "Insolvent" to legal remedies.
"Insolvent" refers to the financial condition of an entity that necessitates the appointment of a receiver or custodian to manage its assets and liabilities.
Definition of "Insolvent" as involving asset foreclosures
This definition ties "Insolvent" to creditor actions.
"Insolvent" means the financial state of an individual or entity subject to asset foreclosures or repossessions due to non-payment of secured debts.
Definition of "Insolvent" as determined by auditors' opinions
This definition connects "Insolvent" to financial reporting.
"Insolvent" refers to the condition stated in an auditor’s opinion, highlighting the inability of an entity to continue as a going concern due to financial distress.
Definition of "Insolvent" as a trigger for automatic termination of agreements
This definition links "Insolvent" to contractual outcomes.
"Insolvent" means the financial status of a party that automatically terminates agreements or contracts under pre-defined insolvency clauses.
Definition of "Insolvent" as a trigger for loan acceleration
This definition ties "Insolvent" to financial agreements.
"Insolvent" means the financial condition of a borrower that triggers loan acceleration, requiring immediate repayment of outstanding balances under the terms of the loan agreement.
Definition of "Insolvent" as a basis for shareholder action
This definition connects "Insolvent" to corporate governance.
"Insolvent" refers to the financial state of a company that allows shareholders to take specific actions, such as initiating liquidation or appointing a new board, as outlined in the corporate charter.
Definition of "Insolvent" as determined by a financial health analysis
This definition links "Insolvent" to formal assessments.
"Insolvent" means the status of an individual or entity based on a financial health analysis indicating insufficient assets or income to cover liabilities and obligations.
Definition of "Insolvent" as related to failing operational sustainability
This definition applies "Insolvent" to ongoing business operations.
"Insolvent" refers to the financial condition of an organization that can no longer sustain its operations due to insufficient revenue or cash flow.
Definition of "Insolvent" as defined in restructuring agreements
This definition ties "Insolvent" to negotiated terms.
"Insolvent" means the condition described in a restructuring agreement, where financial distress requires renegotiation of debt terms or operational adjustments.
Definition of "Insolvent" as indicated by failed capital calls
This definition connects "Insolvent" to funding mechanisms.
"Insolvent" refers to the financial state of an entity unable to meet capital call requirements, resulting in an inability to raise additional funds from investors.
Definition of "Insolvent" as a result of declining asset value
This definition links "Insolvent" to market changes.
"Insolvent" means the financial condition caused by a significant decline in asset values, rendering liabilities greater than assets.
Definition of "Insolvent" as a factor for triggering guarantees
This definition applies "Insolvent" to contingent obligations.
"Insolvent" refers to the financial state of a party that activates guarantees or indemnities provided under the terms of a financial or contractual arrangement.
Definition of "Insolvent" as a condition for dissolution
This definition ties "Insolvent" to organizational termination.
"Insolvent" means the financial state of an entity that necessitates dissolution under corporate or partnership laws due to an inability to meet financial obligations.
Definition of "Insolvent" as a basis for creditor priority
This definition connects "Insolvent" to debt hierarchy.
"Insolvent" refers to the financial condition of an entity that triggers creditor priority rules, determining the order of debt repayment during liquidation or bankruptcy proceedings.
Definition of "Insolvent" as determined by missed financial milestones
This definition links "Insolvent" to contractual benchmarks.
"Insolvent" means the financial status of a party unable to meet agreed-upon financial milestones, as defined in the terms of the agreement.
Definition of "Insolvent" as related to employee wage defaults
This definition applies "Insolvent" to labor obligations.
"Insolvent" refers to the financial condition of an employer unable to pay employee wages or benefits, triggering statutory or contractual remedies.
Definition of "Insolvent" as described in risk mitigation policies
This definition ties "Insolvent" to contingency planning.
"Insolvent" means the financial status of a party addressed in risk mitigation policies, including steps to limit exposure and recover losses in the event of insolvency.
Definition of "Insolvent" as arising from regulatory penalties
This definition connects "Insolvent" to enforcement actions.
"Insolvent" refers to the financial condition resulting from significant fines, penalties, or other regulatory enforcement actions that deplete an entity’s financial resources.
Definition of "Insolvent" as a precursor to receivership
This definition links "Insolvent" to asset management.
"Insolvent" means the financial state of an entity that leads to the appointment of a receiver to manage its assets and operations on behalf of creditors.
Definition of "Insolvent" as a state impacting loan covenants
This definition ties "Insolvent" to financial agreements.
"Insolvent" means the financial condition of a party that causes a breach of loan covenants, including financial ratios or operational requirements outlined in the agreement.
Definition of "Insolvent" as a basis for statutory obligations
This definition connects "Insolvent" to legal requirements.
"Insolvent" refers to the financial state that triggers statutory obligations, such as reporting requirements or mandatory notifications to creditors and stakeholders.
Definition of "Insolvent" as linked to unpaid tax obligations
This definition links "Insolvent" to fiscal responsibilities.
"Insolvent" means the financial condition of an individual or entity that is unable to meet its tax liabilities, resulting in enforcement actions by tax authorities.
Definition of "Insolvent" as determined by shareholder equity depletion
This definition applies "Insolvent" to corporate valuation.
"Insolvent" refers to the state where an entity’s shareholder equity is entirely depleted, leaving liabilities to outweigh total assets.
Definition of "Insolvent" as related to operational shutdowns
This definition ties "Insolvent" to business closure.
"Insolvent" means the financial state that leads to the cessation of business operations due to the inability to cover essential operating expenses.
Definition of "Insolvent" as arising from unfulfilled capital commitments
This definition connects "Insolvent" to funding agreements.
"Insolvent" refers to the condition of a party unable to fulfill its capital commitment obligations under a funding or investment agreement.
Definition of "Insolvent" as defined in supplier contracts
This definition links "Insolvent" to supply chain agreements.
"Insolvent" means the financial condition of a supplier that results in non-performance, delay, or termination of obligations under a supply chain agreement.
Definition of "Insolvent" as tied to insurance claims processing
This definition applies "Insolvent" to policyholder situations.
"Insolvent" refers to the financial state of an insured entity that triggers claims processing under insolvency-related provisions of an insurance policy.
Definition of "Insolvent" as involving cross-default clauses
This definition ties "Insolvent" to financial instruments.
"Insolvent" means the financial condition of a party that activates cross-default provisions across multiple agreements, due to a default in one financial obligation.
Definition of "Insolvent" as determined by external credit evaluations
This definition connects "Insolvent" to independent assessments.
"Insolvent" refers to the financial status of a party assessed as high-risk or unviable based on external credit evaluations or risk ratings.
Definition of "Insolvent" as linked to asset freezing orders
This definition links "Insolvent" to judicial actions.
"Insolvent" means the financial condition of a party subject to asset freezing orders, preventing further dissipation of resources to address outstanding liabilities.
Definition of "Insolvent" as triggering restructuring events
This definition applies "Insolvent" to corporate reorganization.
"Insolvent" refers to the financial state of an entity that necessitates restructuring events, including mergers, divestitures, or operational downsizing to restore solvency.
Definition of "Insolvent" as related to pension fund defaults
This definition ties "Insolvent" to employee benefits.
"Insolvent" means the financial condition of an employer or pension fund unable to meet its obligations to retirees or beneficiaries as agreed.
Definition of "Insolvent" as recognized by trade creditors
This definition connects "Insolvent" to vendor relationships.
"Insolvent" refers to the financial state of a party that results in the suspension or termination of trade credit extended by suppliers or vendors.
Definition of "Insolvent" as identified in risk mitigation frameworks
This definition links "Insolvent" to preventive strategies.
"Insolvent" means the financial condition anticipated or identified through risk mitigation frameworks, allowing proactive measures to limit financial losses.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.