A secured creditor with a hypothec (charge) over a specific immovable property can enforce against that property without having to put the debtor through a full-blown bankruptcy process. That was one of the key outcomes of the Royal Court's decision in Representation of Prospect Holdings Limited[2025] JRC 164.
What happened?
This briefing note provides an outline of the different processes of voluntary winding up and striking off under the Companies (Guernsey) Law, 2008 (as amended) (the “Law”).
Voluntary winding up
The Cayman Islands team obtained what may be the first instance of a permanent stay of an official liquidation of a Cayman Islands company.
Few would disagree that when a company is placed in official liquidation, that is the penultimate step before the company's death. Official liquidators will realise the company's assets and distribute them to stakeholders, before the company's eventual, but inevitable dissolution.
But does official liquidation have to be the end of the company? Can anything be done to halt the march towards dissolution?
1. Montague Goldsmith AG v Goswick Holdings Limited and Ors [2024] JRC 170
What happened?
In UKCloud Ltd(Re Insolvency Act 1986) [2024] EWHC 1259 (Ch), the court was again faced with the age-old question of categorisation of a security interest but this time in respect of a new type of asset, internet protocol (IP) addresses. Could fixed charge security be taken over IP addresses and, if so, was it taken here?
Sian Participation Corp (In Liquidation) (Appellant) v Halimeda International Ltd (Respondent) (Virgin Islands) [2024] UKPC 16
In March 2015 the major high street retailer British Home Stores (BHS) was acquired for £1 by Retail Acquisitions Limited (RAL), a company owned by Mr Dominic Chappell. Mr Chappell became a director of the BHS entities upon completion of the purchase, together with three other individuals.
What happens to a company at the end of an administration is a question that probably only keeps insolvency anoraks up at night.
There are a limited number of potential options, with the rescue of the company as a going concern being the number one objective to which all administrators aspire. However, more often than not, an administration will end with the company entering liquidation or, where the company has no property to permit a distribution to creditors, the dissolution of the company.
An important decision on the “boundary issue” between arbitration and insolvency came out this week. One that has troubled me in the past.
Question: Can you wind up a company for a debt due under a contract containing an arbitration agreement or do you have to go through arbitration first? Up until now, you had to get an arbitral award first, regardless of whether the debt was disputed.
But now, unless the debt is disputed on genuine and substantial grounds, you can press ahead with applying for a winder. So said the Privy Council today.
In Mitchell and others v Al Jaber; Al Jaber and others v JJW Ltd [2024] EWCA Civ 423 the Court of Appeal has confirmed that a director remained subject to a continuing fiduciary duty post liquidation when purporting to transfer assets owned by that company, on the basis he was an “intermeddler”. While the case concerned a BVI company, the court’s decision was based on English-law authorities and therefore has wider significance.
Facts