When Trusts Law And Insolvency Collide

The Joint Administrators of Ceona Crewing Limited (Company) made an application in September 2015 pursuant to section 379(3) of the Companies (Guernsey) Law, 2008 (Companies Law) to the Royal Court for declaratory relief and directions in relation to whether the monies in a segregated account were held on trust under Guernsey law for employees of the Company.  The Application was split into three parts (i) the declaration of trust; (ii) directions for distribution of the assets; and (iii) an order for the Joint Administrators' costs.  For the purposes of this article we will focus only on the first limb of the application, the declaration of trust.  The matter involved an interesting interaction between principles of trust and insolvency law.