The Pauline Action is a legal mechanism that allows creditors to apply to the Royal Court of Jersey to set aside transactions undertaken by a debtor to defraud or otherwise prejudice them.
Emirates NBD Bank PJSC v Almakhawi and Others [2024] JRC 256 is the most recent case from the Royal Court to affirm that the Pauline Action, which has its origins in Roman law, remains an effective debt recovery tool for creditors in Jersey.
Purpose of the Pauline Action
The first half of 2023 witnessed the failure of three financial institutions in quick succession—Silicon Valley Bank (March 10, 2023), Signature Bank (March 12, 2023), and First Republic Bank (May 1, 2023). This was the first time three financial institutions failed in such a compressed time period since the Great Recession of 2008.
Section 1930(a)(6) of Title 28 requires the payment of quarterly fees to the United States Trustee (the “UST”) for each quarter that a bankruptcy case is open. The amount of fees is calculated based on the amount of disbursements made by the debtor during each quarter. But, are these fees payable when a trust, established by a confirmed plan, makes distributions rather than a debtor?
Introduction
Immoveable property
Application for recognition
Consultation with viscount
Letter of request
Issuing representation
Alternative orders
Timescale
Introduction
In the current COVID-19 environment 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. The business may also have locally employed employees to consider.
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