The role of Jersey as a financial centre means that on occasions there will be a requirement for a foreign liquidator or an office-holder under bankruptcy legislation to obtain information or documentation from persons or companies located in the Island. There have been a series of recent court decisions establishing the appropriate levels of co-operation with other jurisdictions.

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. This will commonly 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 and authority to exercise powers in Jersey.

Introduction

There are two principal regimes for corporate insolvency in Jersey: désastre and winding-up. This Briefing seeks to highlight the major features of each and some of the differences between the two.  

Désastre

The law of désastre arose out of the common law of Jersey, although since 1991 the common law has only applied to the extent that express provision is not made in the Bankruptcy (Désastre) (Jersey) Law 1990 (the "Désastre Law").

Who may commence the process?

A Jersey company or one of its creditors may wish the company to be placed into administration in England under Schedule B1 of the UK's Insolvency Act 1986 (the "Act").

A California federal district court granted temporary injunctive relief, requiring the purchaser of a bankrupt hospital to temporarily recognize and bargain with the union that represented nurses employed by the hospital’s seller, pending the outcome of a National Labor Relations Board (“NLRB”) hearing.

Published in The Deal, January 5, 2011

The recent decision in Bank of America, NA v. Lehman Brothers Holdings, Inc. (In re Lehman Brothers Holdings Inc., et. al.), No. 08-13555, Adv. Pro. No. 08-01753, 2010 Bankr. LEXIS 3867 (Bankr. S.D.N.Y. Nov. 16, 2010) has shone a 10,000-watt spotlight onto the scope of common law set-off in New York.

On October 8, 2010, the FDIC approved a Proposed Rule that would implement certain provisions of its authority granted by Congress in Title II of the Dodd-Frank Act (“Title II”) to act as receiver for covered financial companies (failing financial companies that pose significant risks to the financial stability of the United States) when a Bankruptcy Code proceeding is found to be inappropriate. Prior to the enactment of the Dodd‑Frank Act on July 21, 2010, no unified statutory scheme for the orderly liquidation of covered financial companies existed.

The judge presiding over the bankruptcy proceeding of the operator of a Web site and magazine aimed at gay teens has approved a settlement allowing the destruction of personal information of users rather than a sale to creditors as part of the bankruptcy estate. The court approved the settlement after the Federal Trade Commission raised objections to the sale, citing the Web site sign-up confirmation page, which stated that "[w]e never give your info to anybody," and a similar statement directed to subscribers of an associated print magazine.

In re Visteon Corp., No. 10-1944-cv, 2010 WL 2735715 (3d Cir. July 13, 2010), the Third Circuit held that Visteon Corporation (Visteon) could not terminate unvested retiree health and life insurance benefits during a Chapter 11 bankruptcy without seeking court approval pursuant to Bankruptcy Code § 1114, 11 U.S.C. § 1114. The Third Circuit’s decision departs from the rulings of many other federal courts, and is in tension, if not outright conflict, with the Second Circuit’s decision in LTV Steel Co. v. United Mine Workers (In re Chateaugay Corp.), 945 F.2d 1205 (2d Cir.

Expect the unexpected from your Web site privacy policy. In a handful of cases, including two which were recently decided, companies have been thwarted in various, unexpected ways by the commitments made in their online privacy policies.

Are your intellectual property litigators reading your privacy policy?