What are the changes to the Guernsey insolvency law?
The changes take effect from 1 January, and include provisions that, for the first time, will: Require directors to make a declaration of solvency prior to entering a voluntary liquidation and require the appointment of an independent liquidator where solvency cannot be declared..
What does the insolvency Act do?
It sets out the procedures for dealing with insolvency, the powers and duties of insolvency practitioners, creditors, and debtors, and the rules for the distribution of assets. The Act aims to ensure that all creditors are treated fairly and that they receive a fair share of the debtor's assets..
What is the declaration of solvency in Guernsey?
Directors are now given the option to make a declaration of solvency, which is a declaration stating that, in the opinion of the board, the company satisfies the solvency test. If no declaration is made, any liquidator appointed must be independent..
Who can act as a liquidator in Guernsey?
All appointments are subject to the approval of the court, which will consider the relevant experience and qualifications of the proposed office holder. Such court appointed liquidators or administrators are invariably experienced insolvency practitioners..
However, by virtue of the Insolvency Act 1986 (Guernsey) Order 1989 (Insolvency Act Order), the courts of the Bailiwick of Guernsey will assist courts having jurisdiction in relation to insolvency law in any other part of the Bailiwick of Guernsey or any relevant country or territory.
The Bankruptcy Code defines “insolvent” as “financial condition such that the sum of such entity's debts is greater than all such entity's property, at a fair valuation.” Hence, under the Bankruptcy Code, insolvency is “essentially a balance sheet test.” A debtor is insolvent when the debtor's liabilities exceed the
The UK legislation called the Insolvency Act 1986 provides the legal framework for dealing with financial problems of individuals, partnerships, and companies.
United Kingdom - Insolvency Act 1986 (Chapter 45)
Long-awaited amendments to Guernsey's corporate insolvency legislation will come into force on 1 January 2023.
The Companies (Guernsey) Law 2008, as amended (the Companies Law) can in certain circumstances impose personal liability on directors of an insolvent company. A director of a Guernsey company owes both fiduciary and non-fiduciary duties to the company.
The Royal Court of Guernsey is the principal court of first instance in Guernsey (equivalent to the High Court in England). It has unlimited civil jurisdiction in Guernsey and is divided into five divisions. For the purposes of insolvency law, the relevant division is known as the Ordinary Division.
Governing legislation
The Companies (Guernsey) Law, 2008 (Insolvency) (Amendment) Ordinance, 2020 ('the Ordinance') and the Companies (Guernsey) (Insolvency Rules) Regulations, 2022 came into operation on 1 January 2023, following regulations made on 8 December 2022 by the Committee for Economic Development.
The new regime affords insolvency professionals with wide-ranging powers to seek statements of affairs, investigate antecedent transactions, and to undertake
These Parts of the Companies Law were updated by The Companies (Guernsey) Law, 2008 (Insolvency) (Amendment) Ordinance, 2020 (the Insolvency Amendment Ordinance) as supplemented by The Company Insolvency (Guernsey) Rules, 2022 (the Company Insolvency Rules), both of which came into force on 1 January 2023.
How can a company avoid insolvent liquidation in Guernsey?
In certain limited circumstances, the GFSC or the States of Guernsey Commerce and Employment Department can make an application
There is no explicit obligation to initiate proceedings, although directors' fiduciary duties may require them to consider doing so where the company has no prospect of avoiding an insolvent liquidation
Is Guernsey insolvent?
On 9 February 2017, the Committee for Economic Development recommended the enactment of amendments to Guernsey's existing insolvency regime
The States of Guernsey subsequently approved the Companies (Guernsey) Law 2008 (Insolvency) (Amendment) Ordinance 2020 (Ordinance)
What is the Companies (Guernsey) Law 2008?
The Companies (Guernsey) Law 2008 does not provide for any category of stakeholder to have a more significant role than any other category, but both processes are largely creditor driven
The party with the most significant economic interest in the outcome of any proceeding is likely to carry the most weight
Who can take a Guernsey insolvency appointment?
Such court appointed liquidators or administrators are invariably experienced insolvency practitioners
There is no requirement for an ICAS member to hold an insolvency licence to take a Guernsey insolvency appointment
An ICAS member will, under the Public Practice Regulations, require to have a practicing certificate
Insolvency law guernsey
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Walkers is a Cayman Islands headquartered offshore law
Offshore magic circle law firm
Walkers is a Cayman Islands headquartered offshore law firm. Walkers provides legal, corporate, compliance and fiduciary services to global corporations, financial institutions, capital markets participants and investment fund managers. Walkers practices the laws of six jurisdictions from ten offices globally. It is a member of the offshore magic circle.
