At the time of the appointment or of the confirmation of a temporary receiver or the appointment of a permanent receiver, such inquiry as is practicable shall be made by the judge or court relative to the solvency of the estate. When, upon such inquiry or thereafter, it appears to the judge or court that the estate is insolvent, the estate shall be promptly liquidated and no further continuance of the business, except for the purpose of liquidation, shall be permitted, unless, because of exceptional circumstances, it shall be otherwise ordered.
Section 21-6.Insolvent Estates To Be Liquidated
Current through August 12, 2025 (2026 Practice Book edition) · Last verified July 9, 2026
In one sentenceWhen a court or judge finds that an estate under receivership is insolvent, the estate must be liquidated promptly and the business cannot continue except to wind it down, unless exceptional circumstances justify otherwise.
Full Text of Section 21-6
Amendment History
(P.B. 1978-1997, Sec. 490.)
Plain-English Summary
At the time a temporary receiver is appointed or confirmed, or a permanent receiver is appointed, the judge or court must make whatever inquiry into the estate’s solvency is practicable. If that inquiry, or a later one, shows the estate is insolvent, the estate must be liquidated promptly. Once that happens, the business cannot keep operating except for purposes of liquidation, unless exceptional circumstances lead the court to order otherwise.
Frequently Asked Questions
When does the court check whether an estate is insolvent?
At the time of appointing or confirming a temporary receiver, or appointing a permanent receiver, and the inquiry can continue afterward as well.
What happens once an estate is found insolvent?
The estate must be promptly liquidated, and continuing the business is not permitted except for liquidation purposes.
Can the business keep running after an insolvency finding?
Only for liquidation purposes, unless exceptional circumstances lead the court to order otherwise.
Source & verification. The section text is reproduced verbatim from the
official Connecticut Practice Book (Conn. Practice Book § 21-6). Prescribed by the Judges of the Superior Court of Connecticut (Conn. Gen. Stat. Section 51-14). The plain-English summary is original and written by us. Last verified July 9, 2026. ·
Official source
Also known as: insolvent estate liquidation Connecticutreceivership solvency inquiryliquidating an insolvent receivershipwhen must a receiver liquidate