Insolvent Companies

An insolvent company is one that cannot pay its debts as they come due. This means its financial obligations exceed its assets, or it lacks enough cash flow to meet payments. Insolvency can lead to legal actions, including bankruptcy, where a company may restructure its debts or shut down operations. Creditors, who are owed money, may file claims to recover what they can. Insolvency often signals financial distress, impacting employees, investors, and suppliers, and can have broader economic effects depending on the size of the company involved.