1. A debtor shall be deemed insolvent when he fails to perform his due financial obligations.
  2. A debtor who is a legal person or an unicorporated organizational unit granted legal capacity by a separate law shall also be deemed insolvent when the sum of his obligations exceeds the value of his assets, even if the debtor duly performs these obligations.
  3. If it is determined likely that under an arrangement the creditors will be satisfied to a higher degree than they would have been satisfied as a result of bankruptcy proceedings comprising the liquidation of the debtor’s assets, bankruptcy with the possibility to make an arrangement shall be declared.