Introduction

If a fund is insolvent, it is either not able to pay its debts as they fall due, or its assets are less than its liabilities. An investor/creditor will have the ability to put the fund into a formal insolvency procedure and, in most cases, appoint an independent third party to take control of the assets and investigate the conduct of the fund’s directors, managers and other controlling functionaries. Defined terms in this article are the same as the terms which were defined in the potential causes of action article.  

Litigation is not always about money. Sometimes, it really is about the principle of the thing. Sometimes there are rights at stake which cannot be measured in financial terms. Usually, though, litigation is born of a financial loss and ultimately what matters is that the victor receives his spoils.

Introduction

KWL Advertising Limited (in liquidation) ("KWL") -v- Kountouris & Kountouris, Guernsey UnreportedJudgment, 18 October 2006

The Royal Court has recently handed down the final decision in the matter of Eagle Holdings Limited (in compulsory liquidation).[1] In this decision, the Royal Court of Guernsey provided guidance and assistance to the joint liquidators regarding a distribution of surplus funds.

In the current economic environment, directors will be fully focussed on avoiding any breach of their fiduciary duties, particularly if they are directors of companies experiencing or at risk of financial distress.

This client briefing provides a general overview of the duties of directors of Guernsey companies in these circumstances and is not comprehensive. We recommend that clients obtain specific legal advice in relation to any individual matter which may concern them.

Who are the Directors?

UPDATED 3 AUGUST 2020

Updates marked with *

Updated: Ireland, Israel

We take a look at some of the recent emergency legislation and measures implemented by various nations around the world in response to COVID-19. As this is a rapidly developing crisis, please ensure you keep a close eye on the Lexology Coronavirus hub page for the most up-to-date information.

After much anticipation, the UK Supreme Court has handed down its judgment in BTI 2014 LLC v Sequana S.A. [2022] UKSC 25 - and has authoritatively set the baseline for how directors’ duties evolve as regards shareholders and creditors’ interests when a company is in the zone of insolvency.

Background

On 5 October 2022, the UK Supreme Court delivered its judgment in the case of BTI 2014 LLC v Sequana SA & Ors [2022] UKSC 25. This judgment arose from an appeal brought by BTI 2014 LLC against a decision of the English Court of Appeal in 2019.

Global Perspectives on Insolvency, Restructuring & Dispute Resolution 

As primarily offshore lawyers, we speak on a daily basis with onshore counsel, banks, asset managers, trustees, corporates, insolvency practitioners and individuals around the world. Those conversations give our Global Insolvency & Dispute Resolution Practice Group a unique perspective on the different market trends and their regional impact in 2022.