Modified Universalism - The Guernsey Perspective

The Royal Court has recently given clear guidance on the application of the principle of modified universalism to insolvency matters in Guernsey. The case of EFG Private Bank (Channel Islands) Ltd v. BC Capital Group (in liquidation) & Ors [34/2013] will have significant consequences for cross- border insolvencies with a Guernsey element, as it sets out for the first time the principles which the Royal Court should consider when assessing the nature and extent of its obligation to provide "active assistance" to foreign insolvency proceedings.

Background

Interpleader proceedings were issued in March 2013 by EFG Private Bank (Channel Islands) Limited ("EFG") in respect of assets held in accounts in Guernsey (the "Assets"), on behalf of a number of hedge funds which were incorporated in the BVI (in one case, in Anguilla). The hedge funds are in liquidation, with two BVI insolvency practitioners appointed as joint liquidators (the "Joint Liquidators").