In the current economic environment, there are a number of entities that are being restructured. Our current experience has been that such restructurings fall into two areas, namely a debt for equity swap or a release of “toxic” assets from a group structure in order to minimise exposure to this asset class.

Debt for Equity Swap

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.

Law No.  176-V "On Rehabilitation and Bankruptcy" came into effect on 25 March 2014.

The Law "On Rehabilitation and Bankruptcy" (Law) has replaced the Law “On Bankruptcy” dated 21 January 1997. The law applies to legal entities and individual entrepreneurs. As with its predecessor, the Law does not apply to state owned entities, pension funds, banks, and insurance companies (for which special provision is made in the relevant legislation). 

As compared with the previous law, the Law focuses more on rehabilitation procedure.

The new law extends the grounds for shareholders’ liability and invalidation of transactions.

On 26 March 2014, the new Rehabilitation and Bankruptcy Law (the New Law) took effect in Kazakhstan. The New Law supersedes the Bankruptcy Law adopted in 1997 (the Old Law).

On 10 January 2020, new amendments to the “Law on Rehabilitation Procedure and Bankruptcy” dated 7 March 2014 No. 176-V (the “Old Law”) and related legal acts came into effect by the Law dated 27 December 2019 No. 290-VI (the Old Law, as amended, theAmended Law). The new amendments aim to facilitate and expedite the process for unsuccessful businesses to be liquidated. The main features of the Amended Law are outlined below

Conclusion on financial stability by a temporary manager/administrator

The credit crunch has put pressure on a wide range of structures and, as a result, lenders, borrowers and other counterparties are looking more closely at the impact of possible insolvency proceedings. As Jersey companies have often been used in cross-border finance transactions, it is important to be aware of the differences between Jersey and English insolvency procedures for companies.  

What are the main Jersey insolvency procedures for a Jersey company?

These are:-  

Major amendments have been introduced to the Insolvency Law. Although initially the plan was that  these  would  enter  into  force  on 1 January next year, currently a draft law is before the Parliament to postpone the effective date to 1 March 2015. This newsflash deals with the main innovations.

Obligation to file for insolvency

The main law governing insolvency issues in Latvia is the Insolvency Law (Maksātnespējas likums)

The types of proceedings available are as follows:

Key changes proposed in the new Rehabilitation and Bankruptcy Law affect involuntary petitions for bankruptcy, invalidations, trustees' avoidance powers, debtors' dissolution, and priority of claims.

Table of contents

Bankruptcy .............................................................................. 2

Controlled management .......................................................... 2

Moratorium or suspension of payments .................................. 3

Company voluntary arrangement ............................................ 3

Involuntary liquidation.............................................................. 3

Contacts .................................................................................. 4