This process will be an additional option for creditors alongside existing procedures. Currently, options available to a creditor seeking to enforce against a Jersey corporate debtor are limited to:

  • making an application for a declaration that a person’s property is declared en désastre under the Bankruptcy (Désastre) (Jersey) Law 1990 (the Bankruptcy Law). This is available to a creditor with a liquidated claim of more than £3,000; or
  • enforcement of security, subject to the terms of that security; or
  • a dégrèvement (being the process for enforcement of secured lending or execution of judgment debts, by removing all encumbrances from immovable property at the request of a petitioning or enforcing creditor) or réalisation (being the process which runs parallel to dégrèvement and applies to the debtor’s movable property) can be initiated.

The creditors’ winding up procedure under the current Companies Law is, similar to that of a creditors’ voluntary liquidation under English law, a shareholder initiated process. It is proposed that the Companies Law is amended, by way of Regulations and an Order, to permit a creditor (and not just a shareholder) to bring a winding up application, and for the appointment of a liquidator or provisional liquidator (as the circumstances may require) to be made from a register of private sector insolvency practitioners to be kept and maintained by the Viscount (the Jersey insolvency official).

The proposed procedure utilises the familiar English law concept of a statutory demand. It is hoped that this process will lead to more certainty by showing that where a debt is not disputed and where a company is not able to pay its debts as they fall due, it is thus deemed to be insolvent.

The new procedure is intended to draw upon the existing processes within the Bankruptcy Law, as well as looking to the procedures in place in other jurisdictions.  As noted in the consultation paper, by following established concepts and processes, the procedure will be familiar to practitioners, investors and intermediaries and will be grounded on tried and tested and widely understood procedures across jurisdictions, reflecting the reality of complex cross jurisdictional commerce today and enhancing certainty in relation to exit and contingency planning.

Responses to the consultation are welcome before close of business on 6 September 2021. At a time when structuring and restructuring are at the forefront of the minds of many investors, boards, creditors and other stakeholders, another option available to creditors in respect of Jersey companies is likely to be a welcome addition to the armoury of Jersey insolvency procedures.

Do get in touch with Gemma Whale, Andrew Weaver or your usual Appleby contact if you would like to discuss the matter further.

Share
Twitter LinkedIn Email Save as PDF
More News
15 Dec 2022 | News

Appleby invests in non-contentious private client and trusts team in Jersey

Experienced lawyers Nichola Aldridge and Giles Corbin have joined Appleby's Private Client & Trusts ...

1 Dec 2022 | News

Appleby leads in offshore fintech

Appleby has been ranked Band 1 for the firm’s work in the fintech sector in the BVI, Guernsey and ...

20 Oct 2022 | News

High praise for Appleby in 2023 edition of Chambers UK

The Directory recognises 15 Appleby Lawyers from the Group's Guernsey, Isle of Man and Jersey office...

29 Sep 2022 | News

Competition Laws in the Crown Dependencies Relevant to M&A Transactions

Our Appleby Corporate teams in the Crown Dependencies frequently advise on mergers and acquisitions ...

29 Sep 2022 | News

Appleby secures strong endorsements in Legal 500 UK 2023 rankings

The directory recognises XX Appleby lawyers from the Group's Guernsey, Jersey and Isle of Man office...

12 Aug 2022 | News

The wait is over – the Jersey LLC is arriving

Following the registration by the Royal Court of Jersey of the Limited Liability Companies (Jersey) ...

11 Aug 2022 | News

Over 30 Appleby lawyers and nine offices recognised in 2022 IFLR1000

36 Appleby lawyers across nine jurisdictions have been recognised in this year’s IFLR1000 rankings...

13 Jul 2022 | News

Revisions to Continuing Obligations under the Listing Rules of The International Stock Exchange (TISE)

This article provides a summary of Appleby listing agent services in the Channel Islands, and also o...

24 Jun 2022 | News

Civil Financial Penalties Regime: the scope of “senior management function”

The Financial Services Commission (Amendment No. 8) (Jersey) Law 2022 (FSC Amendment Law), which cam...

7 Apr 2022 | News

Discover 'A Bugs World' with Appleby at Durrell Zoo

Appleby in Jersey are joining forces once more with Durrell to host a brand-new, pop-up insect exhib...