This case considers the ability of the Court to ensure that similarly ranked creditors of a debtor are treated equally prior to the commencement of any insolvency procedure including a just and equitable winding up application.
Background
Mr Breifne O'Brien lives in Ireland. In 2008 and 2009 a number of creditors in that jurisdiction obtained judgments against him in the Irish High Court. The Irish Court injuncted Mr O'Brien from dealing with his assets within or without the jurisdiction below €20,000 million.
Ogier has successfully applied for the recognition by the Royal Court of Jersey of English fixed charge receivers. The decision of the Court in Re Estates and General Developments Limited1 is the first time that such an appointment has been recognised in Jersey.
IMMOVABLES
There are two principal insolvency procedures by which a lender can bring about the realisation of a property in Jersey, namely dégrèvement and désastre.
A debtor who fears that his property is going to be taken for his creditors either by way of a dégrèvement or by way of a désastre can apply to the Royal Court for a "Remise de Biens". A remise grants a debtor time to get his affairs in order and effect an orderly sale of all or some of his property thereby enabling him to retain that which he can afford.
Introduction
With the March quarter day fast approaching it is likely that there will be more businesses becoming insolvent. Some of those businesses will have an interest in Jersey property. For example as owners of Jersey property or holders of a lease of retail premises situated in the Island.
Case Summary
The case of Capita Trustees Ltd, RS, NS, The Trustees in Bankruptcy of RS - In the matter of the Dunlop Settlement [2013] JRC 029 concerns an application by Capita Trustees Limited (Capita) in its capacity as trustee of the Dunlop Settlement (the Trust) for approval to it entering into an agreement intended to settle various claims made against the Trust by creditors (the Agreement), the net effect of which would be to exhaust the assets of the Trust.
The Facts
It has been common practice in recent years for the English Courts to make administration orders in respect of Jersey companies with English situs assets, based upon letters of request from the Royal Court of Jersey issued pursuant to section 426 of the UK Insolvency Act 1986. However, a recent case in the English High Court has challenged the basis upon which these administration orders have historically been made.
Background
In the matter of the representation of Anglo Irish Asset Finance [2010] JRC087
This is the latest decision of the Royal Court in relation to an application by a UK creditor (a bank) for a letter of request to be issued to the English High Court requesting that an administration order be made in respect of a Jersey company.
There has been a considerable amount of interest from clients recently on putting Jersey companies holding UK real property and other assets into English administration. Where a Jersey company and its creditors intend to rescue the company as a going concern, or English administration would achieve a better realisation for creditors than a désastre or a winding up, it may be advantageous to commence English administration.
The Statutory Position:
The provisions governing the recognition of a foreign (including a UK) insolvency office holder under Jersey law are found in Article 49 of the Bankruptcy (Désastre) (Jersey) Law 1990 (the 'Law') and Article 6 of the Bankruptcy (Désastre) (Jersey) Order 2006 (the 'Order').