| Commentary

144 Netting off

| Commentary

4: TARGET COMPANY AS BOTH CREDITOR AND DEBTOR

144 Netting off

It is quite common to find that the target company is both creditor and a debtor in relation to the seller and, where the seller is a company, to the other companies in the seller’s group. The temptation in these circumstances is for parties to net off the credits and debits to leave a credit or debit balance. However, unless true set-off circumstances exist, this netting off may be interpreted as a number of waivers or releases by different companies, or repayments of a number of different debts some of

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