The liquidity crisis has increased the need for creative procedures to avoid sudden death bankruptcy in order to salvage existing value.
A Jersey company or a company incorporated elsewhere but administered in Jersey may become involved in insolvency procedures under Jersey law or the law of a jurisdiction outside Jersey.
The Royal Court of Jersey can receive requests from outside Jersey by courts prescribed under the Bankruptcy (Désastre) (Jersey) Law 1990 or based on principles of comity. Such requests may involve a Jersey company or any other company with assets or information situated in Jersey. Insolvency practitioners appointed under a law or by a court outside Jersey will have no authority, as a matter of Jersey law, to act in Jersey. It is normal, therefore, for an application to be made for recognition of the appointment of such practitioners and to authorise them to exercise powers in Jersey.
A Jersey company or one of its creditors may wish the company to be placed into administration in England under Schedule B1 of the UK's Insolvency Act 1986 (the "Act").
The liquidity crisis has increased the need for creative procedures to avoid sudden death bankruptcy in order to salvage existing value.
A Jersey company or a company incorporated elsewhere but administered in Jersey may become involved in insolvency procedures under Jersey law or the law of a jurisdiction outside Jersey.
S271 Insolvency Act 1986 provides that a bankruptcy petition may be dismissed if the court is satisfied that a debtor can pay his debt, or has made an offer to secure or compound the debt, the acceptance of which offer would lead to the petition being dismissed and that the offer has been unreasonably refused. But what is a reasonable refusal?
The Insolvency Service (IS) has published a consultation paper on reforming debtor petition bankruptcy and early discharge from bankruptcy. The proposed reforms, which are aimed at speeding up the procedure and lowering costs, are to:
Where "prejudice" is suffered by a creditor or contributory, the court can order a compulsory liquidation despite a voluntary liquidation having already been entered into.
Where the Courts Service failed to notify the Land Registry of a bankruptcy petition with the effect that property was disposed of without a pending action having been registered, the trustee in bankruptcy had a right to claim damages.
The making of a bankruptcy order alone will not deprive a judgment creditor of a final charging order where it is obtained before the bankruptcy order is made.
To avoid an asset reverting to a bankrupt after the end of his period of bankruptcy, the asset must be realised. An assignment of a beneficial interest for a future price does not amount to a realisation.