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Insolvency Review - Amendments to the Companies Law

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Committee for Economic Development - P.2017/14

The States are asked to decide:-

Whether, after consideration of the Policy Letter entitled 'Insolvency Review - Amendments to the Companies Law dated 9th February, 2017, they are of the opinion:-

1. To approve the proposals set out in section 3 of the Policy Letter to amend the Companies (Guernsey) Law, 2008 as follows:

a. to introduce creditors' committee procedures and rules as set out in paragraph 3.1.1,

b. to allow administrators to make distributions to creditors as set out in paragraph 3.1.2,

c. to allow the Royal Court to permit dissolution of the company in the circumstances set out in paragraph 3.1.3,

d. to introduce objectives of winding up as set out in paragraph 3.2.1,

e. to require an independent liquidator in a voluntary winding up where the company is insolvent as set out in paragraph 3.2.2,

f. to strengthen creditor protection in an insolvent voluntary winding up by introducing the requirements set out in paragraph 3.2.3,

g. to allow inquorate final general meetings in a voluntary winding up as set out in paragraph 3.2.4,

h. to provide for rules for the establishment of claims in a winding up as set out in paragraph 3.2.5,

i. to exempt companies in liquidation from the requirement to prepare audited accounts as set out in paragraph 3.2.6,

j. to allow a liquidator to disclaim onerous assets and unprofitable contracts in the circumstances set out in paragraph 3.2.7,

k. to authorise the establishment of a statutory scheme for unclaimed dividends and direct the preparation of a further policy letter as set out in paragraph 3.2.8,

l.  to introduce a statutory power for the Royal Court to wind up insolvent foreign companies as set out in paragraph 3.2.9,

m. to introduce a statutory power for the Committee for Economic Development to make insolvency rules as set out in paragraph 3.3.1,

n. to require administrators and liquidators to report findings, or suspicions, of misconduct on the part of directors or officers of a company as set out in paragraph 3.3.2,

o. to introduce statutory provisions with regard to transactions at an undervalue and extortionate credit transactions as set out in paragraph 3.3.3,

p. to introduce statutory powers for liquidators to require statements of affairs and to apply to court for orders requiring the production of such statements and other documents and the attendance of directors and former directors for the purpose of examination, as set out in paragraph 3.3.4, and

q. to make ancillary amendments as identified in paragraph 3.3.5 regarding consistency in time periods, utilities and essential services, typographical matters, corrections, clarifications, consequential and minor amendments.

2. To direct the preparation of such legislation as may be necessary to give effect to the above decisions.

The above Propositions have been submitted to Her Majesty's Procureur for advice on any legal or constitutional implications in accordance with Rule 4(1) of the Rules of Procedure of the States of Deliberation and their Committees.

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Proposition - Insolvency Review - Amendments to the Companies Law

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