Guernsey's First Court Order Under Section 380A: Distributions To Unsecured Creditors Explained

What section 380A means for administrators

We recently achieved a significant milestone by obtaining permission from the Royal Court of Guernsey for Joint Administrators to make a distribution to unsecured creditors during an administration. This marks the first order granted under section 380A of the Companies (Guernsey) Law, 2008.

Historically, administrators in Guernsey had no power to make distributions to creditors during administration. Section 380A, introduced on 1 January 2023, changed this by permitting distributions where they assist the statutory purposes of administration:

• The survival of the company or part of its undertaking as a going concern
• A more advantageous realisation of assets than in a winding up