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ARTICLE · 03 DECEMBER 2025

Solvent Liquidations - Check: Are You Really Solvent?

Gowling WLG
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Solvent liquidations are often regarded as an orderly process, but the recent Noal case shows they have exacting requirements. When a company enters a members' voluntary liquidation (MVL)...

CanadaFinance and Banking
Jasvir Jootla
Jasvir Jootla
Amar Adatia
Amar Adatia
Catherine Phillips
Catherine Phillips
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Solvent liquidations are often regarded as an orderly process, but the recent Noal case shows they have exacting requirements. When a company enters a members' voluntary liquidation (MVL), it is not enough simply to have assets that outweigh liabilities. The High Court has confirmed that solvency in this context means being able to pay all debts, including contingent and prospective debts and liabilities, together with statutory interest, within 12 months of starting the process.

Key findings from the Noal case

  • The Noal case has determined that a company in an MVL must be able to pay its debts, together with interest, within 12 months of commencement of its winding up.
  • This is the applicable test when making a declaration of solvency to commence an MVL.

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