Private wealth structures are not immune from insolvency. Here we examine the Jersey and Guernsey position from the trustee's perspective and consider the issues with which a trustee needs to be familiar.
Test for insolvency
Background
Jersey imposed travel restrictions in response to the Coronavirus crisis in March 2020 and has been operating a full lockdown for all residents, apart from essential workers, since 30 March.
The vast majority of employees in the Jersey financial services industry are now working from home and there has been no interruption to business continuity for the sector.
This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.
The High Court has recently considered a number of questions of contractual construction in the context of guarantees: Barclays Bank plc v Price & Ors [2018] EWHC 2719 (Comm).
The recent Court of Appeal decision inLBI EHF v Raiffeisen Bank International AG [2018] EWCA Civ 719 affirms the wide discretion of the non-Defaulting Party to determine "fair market value" in accordance with the close-out mechanism under paragraph 10(e)(ii) of the standard Global Master Repurchase Agreement (2000 version) ("GMRA").
Lehman Brothers Special Financing Inc. v National Power Corporation & Anor [2018] EWHC 487 (Comm) is a significant case on the calculation of Close-out Amount under the 2002 ISDA Master Agreement.
Two important points of principle arise from this judgment, which will have general application to transactions governed by the 2002 ISDA Master Agreement:
The High Court has recently considered the interpretation of Section 6(a) of the 1992 ISDA Master Agreement: Grant & Ors v WDW 3 Investments Ltd & Anor [2017] EWHC 2807 (Ch).