As Guernsey companies, like their international counterparts,
fight to manage the COVID-19 crisis with differing levels of state
support, much has been reported about potential changes to the
insolvency framework available to bolster survival measures.
While Guernsey continues to consider what changes might benefit
local companies, it is worth bearing in mind that the island
already offers a restructuring regime that, if used correctly, can
support the rescue and survival of businesses via a moratorium and
light-touch intervention. That is a rarity in the offshore world,
and is explored in further detail below.
What is Light Touch Administration?
The measures taken by governments around the world to slow the
spread of COVID-19 have seriously impacted the cash flow of many
companies. With an income stream reduced or disappearing overnight
but costs remaining constant, the boards of companies can quickly
find the company fails the solvency test.
