"Wholesale modernisation" of insolvency law welcomed

Friday 16 December 2022

Ogier has welcomed Guernsey's new insolvency law which was enacted earlier this month which its Partners have said "significantly modernise the insolvency process".

The new law is due to come into force on 1 January 2023.

Ogier partner Alex Horsbrugh-Porter (pictured) played a key role in the development of the new insolvency regime as a member of the Insolvency Rules Committee, which has developed a set of rules to supplement and provide useful background and content to the changes implemented.

‌He said: "The new legislation presents a wholesale modernisation of Guernsey's insolvency law, and the legislative tools are now in place to ensure that liquidators and administrators can quickly and efficiently gather in the assets of insolvent companies and return them to the creditors.

"Former directors can no longer refuse to provide documents or answer questions and third parties that hold diverted company assets can now be forced to return those assets.

"Administrations are also likely to be cheaper as administrators can now distribute assets to secured and preferential creditors and then place the company straight into dissolution, and liquidators can now rid themselves of unwanted contracts and property.

"All of this will likely save money and preserve assets for creditors, and is a welcome and substantive change which finally brings Guernsey into line with many other Commonwealth jurisdictions."

‌Mathew Newman, Global Head of Restructuring and Corporate Recovery at Ogier added:‌

"Guernsey can be regarded as an "start/end of the line" jurisdiction in insolvency terms. It is the start of the line because insolvency proceedings are often commenced in the Royal Court of Guernsey, but much of the substantive activity during the insolvency process takes place elsewhere.

"Conversely, it is the end of the line because insolvency office holders appointed in other jurisdictions come to Guernsey to seek assets or information held in Guernsey, for the benefit of creditors. The new reforms have enhanced Guernsey's cross-border capability in respect of both points."