There has been a considerable amount of interest from clients recently on putting Jersey companies holding UK real property and other assets into English administration. Where a Jersey company and its creditors intend to rescue the company as a going concern, or English administration would achieve a better realisation for creditors than a désastre or a winding up, it may be advantageous to commence English administration.

In the matter of the Representation of Gregory Branch and Lee Manning, Joint Liquidators of AAA Holdings Limited (in liquidation) [2009]JRC110

This judgment is of interest as being the first occasion on which the Royal Court in Jersey was asked to sanction the compromise of a claim under Article 170 of the Companies (Jersey) Law 1991 (the "Companies Law").

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

There is currently no administration process in Jersey. However, an interesting area of development is the gradual trend towards seeking English administration for Jersey incorporated companies with assets or businesses in England. This offers a possible alternative for a company to winding up on just and equitable grounds where it is desirable to keep the company as a going concern and certain pre-requisites, as a matter of English law, are met (primarily that administration offers a chance of a better realisation for creditors than winding up).

When doing business with a Luxembourg company in financial distress, the counterpart should be aware that certain transactions are at risk.

Doing business with a bankrupt Luxembourg company

A bankrupt Luxembourg company is automatically deprived from the administration of its assets. All transactions must be entered into by the receiver in bankruptcy acting in the name and on behalf of the bankrupt company.

On 24 November 2017, the Dutch Supreme Court ruled that in the event a suspension of payments is converted into a bankruptcy, interest that accrues after the suspension of payments was granted, but before the debtor was declared bankrupt, can be presented to the bankruptcy trustee for verification (HR 24 November 2017, ECLI:NL:HR:2017:2991).

Summary

Providing financial support to related parties that are in financial distress may be in the interest of the group as a whole, but is not necessarily in the direct interest of the individual group company providing such support. This client briefing discusses that issue from a Dutch corporate law and tax law perspective, including the potential consequences if there is a material difference between the financial risks assumed by the Dutch company and the benefits of entering into such a transaction.

Introduction  

A recent insolvency law case in the Dutch Supreme Court could have serious consequences for software licensees faced with a bankrupt supplier or licensor. The effect of the judgment may be to render traditional software escrow agreements insufficient and to require additional protective measures.

Summary

Following our previous updates (Ebert Construction Receivership – What You Need to Know and Ebert Construction – Receivership and Liquidation), on 12 November 2018 the High Court ordered that the Receivers of Ebert Construction Ltd (in rec and liq) (Ebert) be appointed as the receivers

Supreme Court Judgment dated 10 March 2016 (STS 151/2016)

The judgment of the Supreme Court analyses the objective scope of extension of the liability for obligations and debts for which, as appropriate, the director of a company should be liable and, more specifically, the scope of "the corporate obligations subsequent to the occurrence of the legal ground for dissolution".