When assessing corporate solvency under s 95A of the Corporations Act 2001 (Cth), a financing arrangement with a director or related party can support a finding of solvency even where the loans are technically repayable on demand, provided the evidence establishes that the financier is committed to continuing support and has no intention of demanding repayment in the immediate future. The most important consideration is the degree of commitment to the continuation of financial support. [name withheld] v [name withheld] does not require evidence of ability and willingness to fund from own resources in every case — that requirement applies only where no financial arrangement is in place. Unpaid tax and superannuation debts do not necessarily undermine a finding of solvency based on a financing arrangement if the non-payment reflects management choice or neglect rather than inadequacy of the arrangement.
The full text is available to signed-in members, including the 30 later cases that cite this judgment.
5 of the 30 citing cases carry a classified treatment. How each court treated it is available to signed-in members.