Corporate Insolvency Procedures in the Channel Islands

Originally appeared in Finance, Offshore – Winter 2012

The main corporate insolvency procedures available in Guernsey and Jersey are summarised below.

Creditors Winding Up

Both a Guernsey "voluntary winding up" and a Jersey "creditors' winding up" are initiated by a shareholders' resolution. In Jersey this is immediately followed by a creditors meeting, and unless the creditors nominate a liquidator, the company appoints a liquidator who is then responsible for realising the company's assets and discharging its liabilities. In Guernsey, the liquidator is appointed by ordinary resolution of the Company. Costs incurred by the liquidator in a creditors' winding up are payable out of the company's assets in priority to all other claims. Detailed rules govern the rights of secured and unsecured creditors, the proving of debts and their order of payment, the setting off of debts and interest payable.