ABSTRACT
It is critical to know when the obligation discussed in the book is triggered. Directors as well as administrators and liquidators need to know at what point liability might be incurred. After setting out the background to, and the importance of, the need to resolve the trigger point for the obligation, the chapter explains that insolvency is generally regarded as an uncontroversial point when the obligation arises. The chapter then discusses the fact that the case law has indicated that the trigger could be prior to insolvency and the various formulae that have been used to determine when it arises are considered, particularly in light of the decision in BTI 2014 LLC v Sequana S.A. The Supreme Court has, in obiter, said that the obligation will arise when the company is insolvent, bordering on insolvency or insolvent liquidation or administration is probable. While this comment is not binding, it will be highly persuasive even though it still leaves some uncertainty as to what the trigger will be in any given case.
