Suspension of payments

A situation that has to be declared by a court, which recognizes that a company does not have the liquidity to deal immediately with its payment obligations, even though it does have sufficient assets to cover its debts (it is possible that the sale of assets or the normal course of business enables the temporary liquidity problem to be overcome). If the company's equity situation is such that its assets and receivables are insufficient to meet its payment commitments, it would have to pursue an insolvency declaration.