Solvency and Capital Adequacy

Some transactions, for example loans or dividends, may require a solvency or capital adequacy opinion for the comfort of a lender or board of directors.   There are specific tests and criteria that need to be met to satisfy the fiduciary responsibilities of the Board of Directors and its shareholders (see § 154 and § 160 General Corporation Law of the State of Delaware).

Teknos can provide an opinion that a proposed transaction will not cause the company’s assets to be less than its liabilities (the balance sheet test), that the company will be able to pay its debts as they come due (the cash flow test), and that the capital remaining in the company would be reasonable for the business in which it is engaged (the capital adequacy test).

For assistance with solvency or capital adequacy opinions, please contact us: info@teknosassociates.com