On 19 August 2015 the Royal Court of Guernsey issued an
important Practice Direction concerning the information which will
be required to accompany any future application for the appointment
of a liquidator or administrator. In Practice Direction No. 3 of
2015 the Court has made plain that the following information will
A curriculum vitae of the proposed appointee (in keeping with
existing practice); and
An estimate of the total fees to be charged by the appointee
together with an indication of other expenses to be incurred.
This will include an estimate of such costs including, for example,
legal fees; or
A statement that a creditor or group of creditors has agreed to
underwrite the fees and expenses without charge to other creditors;
An explanation, in exceptional circumstances only, as to why it
is impossible to estimate all or some of the fees and
All applications will need to include a description of the
nature of the work expected to be undertaken whether in or outside
of the Bailiwick of Guernsey.
If a variation of the estimate is necessary (or additional work
is required which was not foreseen) the appointee will need to make
an application for directions to the Court supported by a statement
In addition to this important costs guidance the Practice
Direction also makes plain that all future applications for
directions in a liquidation or administration shall be made in
writing and considered on the papers unless the Court considers
This Practice Direction reflects the creditor friendly approach
of the insolvency jurisdiction in Guernsey to protect the interests
of creditor groups as a whole whilst balancing the commercial
interests of practitioners and interested parties. It remains
to be seen how this will impact upon future applications especially
where, for example, potential liquidators enter into commercially
sensitive arrangements for funding in order to pursue, properly,
defaulting directors or other culpable parties - disclosure of such
arrangements on appointment could impact adversely upon the ability
of liquidators to pursue investigations or hamper the recovery for
creditors where only limited initial exploratory funding may be
available and such information could be used tactically against the
appointee by any defendant.
A guide which outlines the procedures to wind up Jersey registered companies, the circumstances in which transactions entered into by an insolvent company may be set aside, and the circumstances in which a company’s officers and managers may incur civil or criminal liability.
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