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.  

The uncertainty that has descended on global economic markets brought about by the global covid-19 pandemic has been widespread and unprecedented. Anyone looking for clear wisdom on the likely trends in restructuring as we look now to the second half of 2022 and beyond may find the milky darkness of a Magic 8-ball a better barometer of future forecasting.

Here, we provide an overview of the offshore restructuring landscape in light of governmental fiscal stimulus measures introduced due to coronavirus either being reduced, withdrawn or, in some cases, never being put in place.

What is the Guernsey solvency test?

The solvency test, found in section 527 of the Companies (Guernsey) Law 2008 as amended ("the Law"), is used to determine whether a Guernsey company is solvent. For non-regulated companies, it is a two-part test. For regulated companies there is a third part to the test[1] which concerns compliance with the solvency requirements imposed by their specific regulatory regimes. The test is cumulative, meaning that a company is insolvent if it fails any applicable part of the test.

Cash flow solvency

(judgment 22/2009)

This case concerned whether the English Court of Appeal decision in Re Bayoil S.A. (the “Bayoil Case”) would be persuasive in Guernsey and how the Royal Court of Guernsey should exercise its discretion under section 406 of the Companies (Guernsey) Law 2008 (the “Law”).  

Introduction

The current geo-political climate is contributing to the rapid rise to inflation rates in many countries around the world. Governments have reacted with an inevitable increase to interest rates to try and offer some form of counterbalance to rising costs in an effort to stymy localised, and more widespread, economic recessions.

The memorandum has been prepared on the basis of the law and practice in Guernsey as at 1 April 2010.

Introduction  

(Judgment 3/2009)  

The liquidators of Flightlease (Guernsey) Limited (“FLGL”) applied to the Court for an order that no dividends be paid in the liquidation of FLGL to Flightlease (Ireland) Limited (“FLI”) in respect of guarantees given by  

FLGL in respect of FLI’s liabilities. FLI’s liabilities to FLGL were outweighed by the liabilities owed in the opposite direction.  

This article was originally published by ThoughtLeaders4 FIRE.

Introduction

There was a distinct air of positivity and delight to be out and about networking again at the FIRE Starters Global Summit in Dublin. Once again the event was well attended by a wonderful and dynamic group of international professionals from across the advisory spectrum in asset recovery, fraud and insolvency and many new networks were forged over the fun three-day event.

Advocates Mathew Newman and Sam Dingle acted for the Joint Administrators of a Guernsey company (Company), which was a party to ongoing court proceedings in England.

The Joint Administrators applied to the Royal Court of Guernsey seeking an order that it issue a Letter of Request to the High Court of Justice of England and Wales, requesting the High Court to act in aid of and auxiliary to the Royal Court pursuant to section 426 of the Insolvency Act 1986 (1986 Act) in recognising the appointment of the Joint Administrators as administrators of the Company.

This article first appeared in Offshore Red.

Guernsey is a jurisdiction that is well used to requests from foreign insolvency office holders for assistance in collecting in assets located in Guernsey. Occasionally these requests involve assistance in interviewing former directors of companies in an insolvency process.