As has been widely reported, the Commerce and Employment
Department undertook a review of Guernsey's insolvency laws,
both personal and corporate, with significant input from key
stakeholders. The Department has now published itsproposals and outlined both those areas which
will be reformed and projects the Department has decided not to
In respect of reform of Guernsey's corporate insolvency
laws, the Department has decided against introducing a single
insolvency law and instead to amend the Companies (Guernsey) Law,
2008 to facilitate the following key changes:
The introduction of Insolvency Rules;
A requirement that liquidators be independent in an insolvent
voluntary winding up;
Set out the general objectives of liquidation;
Allow for greater information gathering powers by insolvency
officeholders, including the ability to examine current and former
Introducing a provision to claw back transactions at undervalue
and disclaim onerous assets;
The introduction of a statutory duty on administrators and
liquidators to report to the relevant authorities misconduct on the
part of directors and officers of a company;
The introduction of a process to establish and rank claims in a
The express power for administrators to make distributions to
all creditors where these are in accordance with the objects of the
The Department has decided not to pursue the following
Permitting out of court administration appointments;
Providing for a procedure by which the Court may set aside a
The appointment of a receiver as a pre-insolvency measure to
Reforming Guernsey's Désastre and Saisie laws;
Introducing a Company Voluntary Arrangement process; and
Avoidance of charges placed within a certain time period.
The publication of the Department's
proposals is a welcome and significant step forward. It
represents the culmination of many years hard work and co-operation
between the various stakeholders. The proposed changes will enhance
Guernsey's corporate insolvency regime whilst maintaining the
flexibility to respond to new challenges as they arise. The
Department will now submit policy letters to the States for
consideration as a pre-cursor to drafting amending legislation.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
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