A note on In the matter of Restore Builders Limited En Désastre [2024] JRC 290.

The Royal Court of Jersey has recently held, for the first time, that the actions of a Jersey company director constituted wrongful trading and ordered that he be personally liable for the company's debts and disqualified as a director for ten years.

Introduction

The Jersey insolvency legislative and common law framework provides an adaptable and commercially focussed regime for the supervision and handling of the liquidation and restructuring of Jersey entities. This note addresses the different mechanisms by which Jersey incorporated companies may be wound up.

Winding up of a solvent company

A solvent, or "summary", winding up commences where the shareholders voluntarily pass, or are deemed to pass, and file, a special resolution to do so and the directors have confirmed either that the company:

1. State of the Restructuring Market

1.1 Market Trends and Changes

State of the Restructuring and Insolvency Market

There were 27,359 insolvencies in France as of the end of September 2021, down 25.1% from the same period in 2020, and down 47.9% from September 2019. Such reduction is relatively stable across all sectors, including those most severely affected by the health-related restrictions, such as accommodation and food services (down 44.2% year-on-year) and trade (down 28.1% year on year).

Fewer Insolvencies for More Opportunities

At the end of 2021, corporate bankruptcies (for most company sizes and in most sectors) were at their lowest level compared to the pre-COVID-19 figures from 2019, with a 50% drop in insolvency proceedings and a 10% decrease in pre-insolvency situations. This was largely due to the temporary impact of government emergency measures and support, including: