I am intimately aware of the difference between a balance sheet...

I am intimately aware of the difference between a balance sheet and a cash flow insolvency. I have been around this space since 1984 and have been involved in countless contracts that have numerous default clauses. I am also aware that some contracts are a bit lazy when it comes to defining an act of default. As an example, lazy contracts might only say that an act of default occurs 'if wind up proceedings are commenced' or a letter of demand is issued, whereas tighter contracts will state that 'wind up orders be made' before there is an act of default. Granted we don't know what the contract states but even assuming it is a lazy contract then in all likelihood the pertinent clauses dealing with acts of default will be centred around cash flows and the ability to 'meet your debts as and when they fall due'.

The biggest debt AMI have is to Glencore and the largest component of that debt is convertible at AMI's discretion into shares in AMI. This means that the debt can be satisfied in full upon conversion and therefore AMI is able to meet it's debts as an when they fall due.

Proving a company is insolvent when it is producing positive cash flow, has loan and underwriting facilities in place and can meet its debts as and when they fall due is a tough ask no matter how many lawyers you put on the job.

I work on the premise that AMI is not insolvent and Glencore as a business is in a world of pain on all other fronts and that they simply want to get out of their obligations here. This is a relatively free flip of the coin for Glencore: Heads I get to foreclose on the asset, sell it cheap and recover whatever cash i can get, tales i have to honour my agreement with AMI....