The Royal Court in Guernsey will soon be able to wind up foreign companies.
Recent changes to Guernsey's insolvency regime will mean that, for the first time, foreign companies can be compulsorily wound up in Guernsey.
Long-awaited amendments to Guernsey's corporate insolvency legislation will come into force on 1 January 2023.
Introduced by the Companies (Guernsey) Law, 2008 (Insolvency) (Amendment) Ordinance, 2020, the provisions are aimed at further improving and updating Guernsey's corporate insolvency regime. The amendments stem from a wide-ranging consultation finalised in 2017 and represent the most significant development of Guernsey's insolvency law since 2008.
The amendments introduce a number of key changes to the law:
Liquidation
Two decisions handed down on the same day – one by the Eastern Caribbean Court of Appeal and the other by the Commercial Division of the High Court – illustrate the approach of British Virgin Islands Courts to applications to appoint liquidators in circumstances where the subject matter of a dispute as to the existence of a debt falls within the scope of an arbitration agreement.
Introduction
In the recent judgement of In the matter of SPARC Group Limited (en désastre) [2022] JRC 194 (SPARC Group), the Royal Court of Jersey considered the appropriate test for the making of a disqualification order against a director, with the stark nature of the facts justifying a lengthy term of disqualification.
Background
The application for a disqualification order was made by the Viscount, in respect of Andrew Jeremy Mills (Mr Mills), who was the sole director of SPARC Group Limited (the Company), a property development business.
A summary winding up is the procedure used to wind up a solvent Jersey company under the Companies (Jersey) Law 1991 (the 1991 Law).
This guide examines the procedure for carrying out a summary winding up.
Steps
The steps necessary to carry out a summary winding up are as follows:
In one of the most important trust decisions of recent years, which was handed down on Thursday 13 October 2022, the Judicial Committee of the Privy Council (the JCPC) held that the rights of indemnity of successive trustees against the assets of an insolvent trust fund (ie a trust fund that is unable to meet those liabilities) rank pari passu and not on a first in time basis.
mourant.com 2021934/84654107/1 GUIDE Insolvency claims in Guernsey Last reviewed: September 2022 Contents Introduction 2 Misfeasance / breach of statutory duty 2 Wrongful trading 2 Fraudulent trading 3 Preferences 3 Transactions at undervalue 4 Extortionate credit transactions 4 Director disqualification 4 Relief from sanctions 5 Contacts 5 2 mourant.com 2021934/84654107/1 Introduction When a company enters into a formal insolvency process, the office holder will conduct an examination into the affairs of the company.
Foreign insolvency proceedings (including those ordered by the UK courts) have no direct operation in Guernsey. Therefore foreign insolvency office holders looking to take steps in Guernsey, such a collecting in assets or compelling the production of information from third parties, will need to first be recognised under Guernsey law before steps can be taken in this jurisdiction.
Guernsey has not introduced legislation based on the UNCITRAL model law on cross-border insolvency. It is also not (and was not prior to Brexit) subject to the Recast Insolvency Regulations.
BVI | CAYMAN ISLANDS | GUERNSEY | HONG KONG | JERSEY | LONDON mourant.com 2021934/84489769/1 GUIDE The Solvency Test Last reviewed: September 2022 Contents Introduction 2 The Solvency Test 2 Background 2 Statutory definition 2 The cash flow test 2 The balance sheet test 2 Factors to consider 2 When is the solvency test considered important?
A recent decision of the Cayman Islands Grand Court is an important reminder that a liquidator's costs claimed from trust assets must be proportionate and reasonable, and will be refused on certain grounds.
Background