In one of the most important trust decisions of recent years, which was handed down on Thursday 13 October 2022, the Judicial Committee of the Privy Council (the JCPC) held that the rights of indemnity of successive trustees against the assets of an insolvent trust fund (ie a trust fund that is unable to meet those liabilities) rank pari passu and not on a first in time basis.

Under Irish and UK law, company directors owe fiduciary duties to act in good faith in the interests of the company. The company's interests in this context usually means the collective best interests of the members. However, UK and Irish authorities have developed directors' common law duties, such that in cases of insolvency, directors have a duty to consider the interests of the company's creditors.

mourant.com 2021934/84654107/1 GUIDE Insolvency claims in Guernsey Last reviewed: September 2022 Contents Introduction 2 Misfeasance / breach of statutory duty 2 Wrongful trading 2 Fraudulent trading 3 Preferences 3 Transactions at undervalue 4 Extortionate credit transactions 4 Director disqualification 4 Relief from sanctions 5 Contacts 5 2 mourant.com 2021934/84654107/1 Introduction When a company enters into a formal insolvency process, the office holder will conduct an examination into the affairs of the company.

Foreign insolvency proceedings (including those ordered by the UK courts) have no direct operation in Guernsey. Therefore foreign insolvency office holders looking to take steps in Guernsey, such a collecting in assets or compelling the production of information from third parties, will need to first be recognised under Guernsey law before steps can be taken in this jurisdiction.

Guernsey has not introduced legislation based on the UNCITRAL model law on cross-border insolvency. It is also not (and was not prior to Brexit) subject to the Recast Insolvency Regulations.

BVI | CAYMAN ISLANDS | GUERNSEY | HONG KONG | JERSEY | LONDON mourant.com 2021934/84489769/1 GUIDE The Solvency Test Last reviewed: September 2022 Contents Introduction 2 The Solvency Test 2 Background 2 Statutory definition 2 The cash flow test 2 The balance sheet test 2 Factors to consider 2 When is the solvency test considered important?

In a William Fry article published earlier this year, we discussed the Irish government's approval to opt-in to a regulation amending Annexes A and B to the European Insolvency Regulation 2015/848 (EIR Recast) regarding the recognition of insolvency processes recently introduced in other EU Member States.

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:

A recent decision of the Cayman Islands Grand Court is an important reminder that a liquidator's costs claimed from trust assets must be proportionate and reasonable, and will be refused on certain grounds.

Background

The Cayman Islands' Companies (Amendment) Act, 2021 (the Amendment Act) has now come into force. The Amendment Act introduces a new corporate restructuring process and the concept of a dedicated 'restructuring officer' into the Cayman Islands Companies Act (2022 Revision). Under the Amendment Act, the filing of a petition for the appointment of a restructuring officer triggers an automatic global moratorium on claims against the company, giving it the opportunity to seek to implement a restructuring.

Introduction

This Guide explains the procedure for administration order proceedings in respect of Guernsey companies.

Administration orders

The purpose of administration orders

The provisions for Guernsey companies to be placed into administration are set out in Part XXI of the Companies (Guernsey) Law, 2008 (the Law).