What is the Guernsey solvency test?

The solvency test, found in section 527 of the Companies (Guernsey) Law 2008 as amended ("the Law"), is used to determine whether a Guernsey company is solvent. For non-regulated companies, it is a two-part test. For regulated companies there is a third part to the test[1] which concerns compliance with the solvency requirements imposed by their specific regulatory regimes. The test is cumulative, meaning that a company is insolvent if it fails any applicable part of the test.

Cash flow solvency

Deutsche Bank held an under-secured home mortgage from a Chapter 13 debtor. The debtor was in arrears, but wanted to retain possession and control of her home. Thus, in her Chapter 13 plan, the debtor proposed to cure the arrearage, as required by 11 U.S.C. § 1322(e). The problem, however, was that the parties could not agree on the arrearage amount.