Off-shore focus: The Channel Islands (Pt 3)

• Outlines corporate rescue and restructuring procedures in Jersey and Guernsey.

Jersey

Jersey does not have a corporate rescue process allowing a company to be restructured and trade out of financial difficulty, unlike other jurisdictions such as the UK administration.

The main options for a financially distressed Jersey company are largely found under the Companies (Jersey) Law 1991 (the CJL). These provisions are based on the UK’s Companies Act 1985 (the UK Act) and the Royal Court of Jersey (RCJ) has followed guidance from the English courts in relation to the UK Act when considering similar provisions under the CJL.

Scheme of arrangement

Part 18A of the CJL provides that a Jersey company can enter into a scheme of arrangement (SOA) with its creditors or shareholders. An SOA enables a Jersey company to reach a formal compromise or arrangement with its creditors or members