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ARTICLE · 04 MARCH 2025

Jersey Company Law Series: Voidable Transactions

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Where a liquidator of a Jersey company identifies loss suffered by the company as a result of transactions entered into by the directors the transaction may be voidable. There are statutory mechanisms to restore.

JerseyCorporate/Commercial Law
James Turnbull
James Turnbull
Nigel Sanders
Nigel Sanders
Marc Seddon
Marc Seddon
Fraser Hern
Fraser Hern
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KEY TAKEAWAYS

  • Where a liquidator of a Jersey company identifies loss suffered by the company as a result of transactions entered into by the directors the transaction may be voidable
  • There are statutory mechanisms to restore the company to the position it would have been had the voidable transaction not taken place
  • This guide considers three types of voidable transactions unfair prejudice, preferences and extortionate credit transactions

When a liquidator is appointed in a Creditors' Winding Up under the Companies (Jersey) Law 1991 (the "Companies Law") a key duty following their appointment is to investigate the affairs of the company.

Where a liquidator of a Jersey company identifies loss suffered by the company as a result of transactions entered into by the directors, the Companies Law provides certain statutory mechanisms to assist in restoring the company to the position it would have been in, had it not entered into the transaction.

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