The Royal Court recently brought an end to an important chapter in a long-running dispute regarding control of the exploration and exploitation of the oil and gas reserves of Georgia. This judgment makes it clear that liquidators can approach the court to approve a significant decision that they have taken to enter into a transaction and that such decision is akin to a Public Trustee v Cooper blessing of a momentous decision in a trusts context.
The Companies Law provides for companies, protected cell companies, incorporated cell companies and cells thereof to be placed into administration and for an administrator to be appointed to manage their affairs while the administration order remains in force. In January 2020 an ordinance was passed, introducing various changes to insolvency law in relation to both administrations and liquidations. This article sets out the changes which affect new administrations.
Many of the key emergency legislative measures put in place to combat the effects of COVID-19 have been aimed at protecting the local economy, with the focus on the prevention of insolvency rather than insolvency itself. These measures include a payroll co-funding scheme, a grant for small businesses and the self-employed and a guarantee scheme, under which the states will work with the high street banks to provide loans to trading businesses with an annual turnover of less than £10 million.
The States of Guernsey recently passed the Companies (Guernsey) Law 2008 (Insolvency) (Amendment) Ordinance 2020, making Guernsey an even more desirable forum for insolvency proceedings. The changes show that Guernsey is prepared to arm insolvency office holders with the necessary tools and powers to tackle, draw in and preserve the assets of an insolvent company for the benefit of creditors.
Two joint administrators recently applied to the Royal Court of Guernsey seeking an order that it issue the High Court of Justice of England and Wales with a letter of request to act in aid of and auxiliary to the Royal Court in recognising their appointment as administrators of a company. While the Royal Court has dealt with incoming letters of requests, in making the application, counsel was unaware of any case where the Royal Court's jurisdiction to issue a letter of request had previously been considered.
A recent Royal Court judgment is important as it appears to be the first time that a provisional liquidator has been appointed by the court over a solvent Guernsey company. This case adds helpful guidance to the Guernsey insolvency regime as it demonstrates that the Royal Court adopts a pragmatic and flexible approach when exercising its discretion, particularly where the parties face unusual circumstances.
In Guernsey, schemes of arrangement are governed by the Companies Law. As no practice statement or direction has been used by the Royal Court to date, English practice directions and practice statements are used in Guernsey as guidance and best practice. Any member schemes relating to a Guernsey incorporated company must be brought in Guernsey.
The Commerce and Employment Department has published a consultation paper on various options for reforming Guernsey's insolvency regime for both personal and corporate insolvency. The paper proposes some wide-ranging reforms and seeks industry responses on various issues in order to augment, develop and regulate the insolvency regime on the island.