In our October update, we provided a briefing on the important
decision in Representation of the Z Trusts [2015] JRC 196C
which provided welcome guidance, and something of a warning, to
trustees who find themselves administering trusts that are
insolvent.
A link to this briefing can be found here. The briefing
concluded by noting that the Royal Court had yet to establish the
appropriate insolvency regime for trusts and, in particular,
whether it would appoint insolvency practitioners to undertake the
asset realisation process.
Earlier this month, the Royal Court set out its position on
these issues in Representation of the Z Trusts [2015] JRC
214.
Background
As a reminder, "Mrs C", the settlor, had
established a series of Jersey trusts. Two of the trusts were
"insolvent" - the Z II Trust and the Z III Trust
- meaning that the trustees were unable to discharge liabilities as
they fell due out of trust assets.
