There is currently no administration process in Jersey. However, an interesting area of development is the gradual trend towards seeking English administration for Jersey incorporated companies with assets or businesses in England. This offers a possible alternative for a company to winding up on just and equitable grounds where it is desirable to keep the company as a going concern and certain pre-requisites, as a matter of English law, are met (primarily that administration offers a chance of a better realisation for creditors than winding up).

If a company in liquidation has a claim against another entity, can the liquidator compromise the claim on his own or must he do so with reference to the creditors to whom the settlement proceeds will make their way? That was answered with the Royal Court saying that creditors should ordinarily be given the opportunity to appear at the hearing at which the compromise is sanctioned [link to 2009 JRC 110].

The executor of the estate of the deceased who had been the principal mover behind the Belgravia Group, was faced with two novel circumstances. First, the estate appeared totally insolvent but yet the executor had no set of rules to deal with creditors (the Bankruptcy (Désastre) (Jersey) Law 1990) does not apply to the property of a deceased). The Royal Court considered the matter and ordered a process which mirrored the rules applying to a désastre.

The current position

In one of a number of cases in which Bedell Cristin has acted for English trustees in bankruptcy who have sought recognition in Jersey for the purposes of seeking documents from Jersey trustees in order to trace assets of the bankrupt, the court was asked to recognise the trustee, even though the petitioning creditor in the bankruptcy was a foreign revenue (HMRC), whose claim comprised 99.8% of all claims against the bankrupt. There is a long established rule in England, Jersey and elsewhere which prevents enforcement of foreign revenue claims.

In an Opinion issued on December 2, 2009 in the Washington Mutual, Inc. ("WaMu") Chapter 11 case, the Delaware Bankruptcy Court held that Bankruptcy Rule 2019 clearly applies to "ad hoc committees," regardless of how they might try to disclaim collective action. As a result, the members of an informal group of WaMu bondholders must now provide detailed information concerning their holdings, including a history of when they bought and sold their bonds and the prices paid. Perhaps more importantly, the Opinion packs a second bombshell.

In the chapter 11 proceedings for ION Media Networks, a distressed fund (Cyrus) purchased second lien debt and then employed what the Court characterized as "aggressive bankruptcy litigation tactics as a means to gain negotiating leverage." In a November 24, 2009 Memorandum Decision, Judge James Peck of the United States Bankruptcy Court for the Southern District of New York stopped Cyrus in its tracks, holding that the Intercreditor Agreement (ICA) between the first lien and second lien lenders would be enforced to deny Cyrus (i) the ability to assert that certain assets were outside of th

Background

The concept of cell companies was first introduced to Jersey in February 2006. In addition to the widely recognised principle of the protected cell company ("PCC"), a new concept of incorporated cell company ("ICC"), the first of its kind, was also implemented.

KWL Advertising Limited (in liquidation) ("KWL") -v- Kountouris & Kountouris, Guernsey UnreportedJudgment, 18 October 2006

In U.S. v. Apex Oil, a three-judge panel of the Seventh Circuit ruled 3-0 that EPA’s cleanup injunction against the corporate successor to a chemical company was not discharged in Chapter 11 because the injunction does not create a right to payment and, consequently, is not a ‘debt’ under the Bankruptcy Code.