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1. Traditionally, English law has employed two primary tests for determining whether a company or an individual is unable to pay their debts: the ‘cash flow’ insolvency and the ‘balance sheet’ insolvency tests. The limitations of adopting a purely commercial analysis of insolvency by simply applying a unitary cash flow approach are succinctly and ably summarised by Professor Goode in The Principles of Corporate Insolvency Law:
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"This is the ultimate statement of where the law on IVAs is to be found in our great common law...