| Commentary

143 Indebtedness remains outstanding

| Commentary

143 Indebtedness remains outstanding

If the target company’s indebtedness is allowed to remain outstanding, but on modified terms, then there will generally be no financial assistance within Section 678 of the Companies Act 2006 even if the new terms are more onerous than the old1. This is because the definition of ‘financial assistance’ in Section 677(1) of the Companies Act 2006 does not include the alteration of the terms of an agreement for valuable consideration. Where the indebtedness is on demand, the target company will be treated as receiving valuable consideration if it is given more time to pay, and

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