[§651C-2] Insolvency. (a) A debtor is
insolvent if the sum of the debtor's debts is greater than all of the debtor's
assets, at a fair valuation.
(b) A debtor who is generally not paying his
or her debts as they become due is presumed to be insolvent.
(c) A partnership is insolvent under
subsection (a) if the sum of the partnership's debts is greater than the
aggregate, at a fair valuation, of all of the partnership's assets, and the sum
of the excess of the value of each general partner's nonpartnership assets over
the partner's nonpartnership debts.
(d) Assets under this section do not include
property that has been transferred, concealed, or removed with intent to
hinder, delay, or defraud creditors or that has been transferred in a manner
making the transfer voidable under this chapter.
(e) Debts under this section do not include an
obligation to the extent it is secured by a valid lien on property of the
debtor not included as an asset. [L 1985, c 216, pt of §1]
Notes of Decisions
Cited in
5
cases (
3 in the last 5 years), 2015–2023 · leading case:
Schmidt v. HSC, Inc., 358 P.3d 727 (Haw. App. 2015).
Schmidt v. HSC, Inc., 358 P.3d 727 (Haw. App. 2015).
· cites it 3× “Nor, based on the HRS § 651C-2 definition of insolvency, can we conclude that Realty Finance was insolvent at the time of those transfers.”
United States v. Sandwich Isles Commc'ns, Inc. (D. Haw. 2023).
· cites it 2× “mmary judgment as to insolvency reasoning that “[t]he book value of the assets, correctly reported in accordance with [generally accepted accounting principles], may or may not coincide with the fair valuation of the assets,” and where the expert witness “acknowledged that he…”
Rolloffs Hawaii, LLC - Adversary Proceeding (Bankr. D. Haw. 2019).
“Both the Debtor and its sole members, Trashmasters 14 Haw. Rev. Stat. § 651C-2(a). Fraudulently transferred assets, and debts secured by liens on such assets, are excluded for purposes of the “balance sheet” test.”
— Haw. Rev. Stat. § 651C-2(a) — 4 cases
Schmidt v. HSC, Inc., 358 P.3d 727 (Haw. App. 2015).
“Nor, based on the HRS § 651C-2 definition of insolvency, can we conclude that Realty Finance was insolvent at the time of those transfers.”
United States v. Sandwich Isles Commc'ns, Inc. (D. Haw. 2023).
“mmary judgment as to insolvency reasoning that “[t]he book value of the assets, correctly reported in accordance with [generally accepted accounting principles], may or may not coincide with the fair valuation of the assets,” and where the expert witness “acknowledged that he…”
Rolloffs Hawaii, LLC - Adversary Proceeding (Bankr. D. Haw. 2019).
“Both the Debtor and its sole members, Trashmasters 14 Haw. Rev. Stat. § 651C-2(a). Fraudulently transferred assets, and debts secured by liens on such assets, are excluded for purposes of the “balance sheet” test.”
— Haw. Rev. Stat. § 651C-2(b) — 2 cases
United States v. Sandwich Isles Commc'ns, Inc. (D. Haw. 2023).
“mmary judgment as to insolvency reasoning that “[t]he book value of the assets, correctly reported in accordance with [generally accepted accounting principles], may or may not coincide with the fair valuation of the assets,” and where the expert witness “acknowledged that he…”
— Haw. Rev. Stat. § 651C-2(d) — 1 case
Schmidt v. HSC, Inc., 358 P.3d 727 (Haw. App. 2015).
“Nor, based on the HRS § 651C-2 definition of insolvency, can we conclude that Realty Finance was insolvent at the time of those transfers.”
— Haw. Rev. Stat. § 651C-2(e) — 1 case
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