The States of Jersey published a White Paper on a proposed statutory insolvency payments scheme (the "Scheme") on 3 December 2009, with a closing date for consultation responses of Friday 5 February 2010.
The White Paper states:
The Banking Business (Depositors Compensation) (Jersey) Regulations 2009 came into force on 6 November 2009, establishing a compensation scheme providing individual depositors with protection of up to £50,000 per person, per Jersey banking group, in the event of the bankruptcy of a Jersey bank.
The liquidity crisis has increased the need for creative procedures to avoid sudden death bankruptcy in order to salvage existing value.
A Jersey company or a company incorporated elsewhere but administered in Jersey may become involved in insolvency procedures under Jersey law or the law of a jurisdiction outside Jersey.
On Friday, the Office of the Comptroller of the Currency closed The La Coste National Bank , headquartered in La Coste, Texas, and the FDIC was named receiver.
On Friday, the Florida Office of Financial Regulation closed Marco Community Bank, headquartered in Marco Island, Florida, and the FDIC was named receiver. As receiver, the FDIC entered into a purchase and assumption agreement with Mutual of Omaha Bank., headquartered in Omaha, Nebraska, to assume all of the deposits of Marco Community Bank.
On Friday, the OTS closed La Jolla Bank, FSB, headquartered in La Jolla, California, and the FDIC was named receiver.
On Friday, the Illinois Department of Financial and Professional Regulation – Division of Banking closed George Washington Savings Bank, headquartered in Orland Park, Illinois, and the FDIC was named receiver.
Treasury's most recent Transactions Report reveals a loss of $2,334,120,000 from two institutions in bankruptcy.
Last Friday, financial services group Dexia SA announced that it had reached an agreement with the European Commission relating to its restructuring plan. Dexia had previously received approximately €6.4 billion in bailout money from Belgium, France and Luxembourg. Pursuant to the negotiated restructuring plan, Dexia will:
The Royal Court of Jersey can receive requests from outside Jersey by courts prescribed under the Bankruptcy (Désastre) (Jersey) Law 1990 or based on principles of comity. Such requests may involve a Jersey company or any other company with assets or information situated in Jersey. Insolvency practitioners appointed under a law or by a court outside Jersey will have no authority, as a matter of Jersey law, to act in Jersey. It is normal, therefore, for an application to be made for recognition of the appointment of such practitioners and to authorise them to exercise powers in Jersey.