Update

Guernsey Insolvency and Restructuring Regime Hub

minute read

1 January 2023

Update

For an overview of the changes, see the following Updates from our team:

Changes to Guernsey’s insolvency regime in force from 1 January 2023

Long-awaited amendments to Guernsey’s corporate insolvency legislation came into force on 1 January 2023. The amendments introduced a number of key changes to the law, covering liquidation, administration and office holders’ powers. These provisions only apply to liquidations or administrations commenced on or after 1 January 2023.

This Update provides an overview of the key changes.

Winding up foreign companies in Guernsey

One of the changes to the regime was to allow foreign companies to be compulsorily wound up in Guernsey. The amendments introduced the concept of the ‘non-Guernsey company’ which applies to any overseas company (or other body prescribed for these purposes) but not a company registered in the Guernsey register of companies.

The new provisions were a welcome addition and reinforce Guernsey role as a leading international financial services centre.

Liquidators’ new investigative powers

The amendments to Guernsey’s corporate insolvency legislation gave liquidators more investigative powers and provided a statutory power for liquidators and administrators to set aside transactions at undervalue. One of the most powerful investigative weapons in any liquidator’s armoury is the ability to compel the production from third parties of information and documents regarding the affairs of the company. Until these changes, the precise scope of the liquidator’s ability to seek production of such information or documents in Guernsey was uncertain, relying on ill-defined common law powers.

The reforms were important as they provided a number of new statutory powers of investigation to assist with the effective winding up of companies.

Changes to voluntary liquidation in Guernsey

The changes affected voluntary liquidations in a number of ways, including to:

• make a distinction between solvent and insolvent liquidations;• make detailed provision for the functioning of creditor meetings;• introduce the requirement for liquidators to report ‘delinquent’ officers to the Guernsey Registry and, in the case of regulated entities, to the GFSC;• introduce the power to disclaim onerous property; and• provide that companies in liquidation are now exempt from the requirement to have their accounts audited.

If you would like to sign up to our Guernsey Insolvency & Restructuring mailing list to receive regular Updates, please complete the subscription form and select the ‘Insolvency & Restructuring’ field under ‘Guernsey Law’.

Bookmark this page and read our Updates for further news or contact one of our team who would be delighted to meet over a coffee to talk through your business needs and provide guidance and advice.