Fallout from the global pandemic continues to throw light on the responsibilities of directors in times of financial distress. This briefing examines those duties in greater detail, particularly in relation to Guernsey’s company law.
Decisions, decisions
Directors owe duties to the companies they serve and ordinarily discharge those duties with reference to the interests of the companies’ members as a whole.
Expected for almost two months, the law that partially and temporarily modifies the insolvency legislation has been adopted on 21 March 2021 at last.
This is nearly two months after the general moratorium on bankruptcies, that was in force since 28 October 2020, expired.
1. Why this legislative intervention was necessary
The main purpose of this measure is to adapt the existing restructuring toolbox to the needs of Belgian companies facing major financial difficulties due to the corona crisis.
On l’attendait depuis bientôt deux mois, voire plus : le 21 mars 2021, une loi réformant partiellement et temporairement le droit de l’insolvabilité a été votée.
Cette loi intervient presque deux mois après la fin du moratoire général sur les faillites en place depuis le 28 octobre 2020 et qui prenait fin le 31 janvier dernier.
1. Pourquoi cette intervention législative était nécessaire
Hervorming van de insolventiewetgeving
Meer dan twee maanden hebben we er op moeten wachten, maar op 21 maart 2021 kwam eindelijk de goedkeuring van de wet die de insolventiewetgeving gedeeltelijk en tijdelijk hervormt.
Dit was bijna twee maanden nadat het algemene moratorium op faillissementen dat sinds 28 oktober 2020 van kracht is, afliep.
1. Waarom deze wetgevende tussenkomst noodzakelijk was
Réforme de droit de l'insolvabilité
On l’attendait depuis bientôt deux mois, voire plus : le 21 mars 2021, une loi réformant partiellement et temporairement le droit de l’insolvabilité a été votée.
Cette loi intervient presque deux mois après la fin du moratoire général sur les faillites en place depuis le 28 octobre 2020 et qui prenait fin le 31 janvier dernier.
1. Pourquoi cette intervention législative était nécessaire
In its recent decision in Net International Property Limited v Erez, the Eastern Caribbean Court of Appeal considered whether the BVI Courts had jurisdiction at common law to recognize an insolvency office-holder appointed in the courts of Israel, and whether and to what extent the BVI Courts could grant assistance to that office-holder at common law.
In the Representation of Matthew David Smith and Ors. [2021] JRC 047 the Royal Court of Jersey has handed down an important decision, exercising its discretion to grant a moratorium in substantially the same terms as provided under the UK Insolvency Act 1986.
In this article, consultant John Greenfield, partner David Jones and associate Steven Balmer, examine innovative mechanisms by which creditors may seek to investigate secure assets held in Guernsey structures. In the second part of the article, the authors look particularly at companies and how the traditional insolvency regimes may be employed in aid of creditors but also at how the use of share security may unlock certain doors.
Recognition of UK insolvencies in Europe after Brexit[1] is navigating uncertain waters. Following the completion of Brexit, the UK has left parts of the EU's private international law realm, including the application of Regulation (EC) 1346/2000 on Insolvency proceedings (the EU Insolvency Regulation). Therefore, since January this year, any reciprocal statutory cooperation in insolvency law matters between the UK and the EU has ceased.
This legal guide summarises the scope of directors’ duties when a British Virgin Islands company encounters financial difficulties.
Introduction
This legal guide should be read in conjunction with the legal guide entitled “Duties of a director under British Virgin Islands Law” which describes in further detail the duties which British Virgin Islands law imposes on a director generally.