This article will look at the recent decision of David Doyle J in In the Matter of HQP Corporation Limited (in Official Liquidation) (7 July 2023) and its effect on the ability of investors to recover damages from a company in which they have acquired shares as a result of a fraudulent misrepresentation.
Introduction
The case involved an application by liquidators for direction in relation to three issues in the winding up of the Company:
The Royal Court has recently handed down the final decision in the matter of Eagle Holdings Limited (in compulsory liquidation).[1] In this decision, the Royal Court of Guernsey provided guidance and assistance to the joint liquidators regarding a distribution of surplus funds.
Introduction
Meetings of creditors and shareholders
Reporting delinquent officers
Declaration of solvency
Disclaiming onerous property
Comment
Historically, Guernsey's insolvency law had limited operational provisions (compared to English law) and was largely developed by a bespoke and flexible application of common and customary law principles by the Royal Court. The old regime will now be updated and revised by the Companies (Guernsey) Law, 2008 (Insolvency) (Amendment) Ordinance 2020 (Ordinance) which was passed on 15 January 2020. Although it does not yet have force of law it is anticipated to become law in the latter part of this year.
When a plaintiff obtains judgment against an insured but insolvent defendant in the Cayman Islands is the plaintiff entitled to the policy proceeds or do they have to be paid to the liquidator for the benefit of the defendant's creditors? The answer is yes when the claim involves a vehicle but is less clear in other cases. This article considers the arguments for and against a plaintiff being entitled to the policy proceeds in cases that do not involve a vehicle.
Background
The recognition of the powers of an English trustee in bankruptcy in Guernsey is generally pursued either by way of a letter of request issued by the foreign court pursuant to section 426 of the Insolvency Act 1986 (Insolvency Act) or by way of an application via the common or customary law.
The recent decision from the Guernsey Royal Court in DM Property Holdings (Guernsey) Limited (in Liquidation)(1) is of fundamental importance to Guernsey insolvency practitioners as it provides cautionary guidance on the practical implications of Practice Direction 3/2015.