The Companies (Jersey) Amendment No. 2 Law 2026, amending the Companies (Jersey) Law 1991 (the "Companies Law"), comes into force on 19 June 2026. For the first time, the legislation introduces a domestic administration regime in Jersey, through the insertion of Part 20B into the Companies Law, filling a gap between informal restructurings and terminal insolvency processes.
The new Part 20B is supplemented by the Companies (Secured Creditors and Notice of Application for Administration Order) (Jersey) Order 2026, which will come into force on 24 June 2026 (the "Ministerial Order").
A new era for corporate rescue in Jersey
Historically, Jersey’s insolvency regime has offered a range of procedures, including désastre (bankruptcy), dégrévement, remise de biens, creditors’ winding up, and just and equitable winding up. While effective in certain contexts (noting that a just and equitable winding up has been used to effect a pre-pack sale in the past), these mechanisms have traditionally been perceived as more insolvency/liquidation-focused and less conducive to the restructuring or rescue of a business. Whilst a scheme of arrangement is also available, debtor schemes are few and far between.
The new administration regime in Jersey is designed to provide breathing space to financially distressed companies, enabling them to reorganise their affairs, preserve value, and potentially continue as going concerns.
Removal of the need for letters of request
The reform is significant from the perspective of cross-border insolvency practice. As Jersey had no equivalent to administration, this left Jersey companies and their creditors in an unsatisfactory situation with little room to manoeuvre to rescue the company if it got into financial distress. However, the Royal Court of Jersey (the "Royal Court") has held repeatedly that it has an inherent jurisdiction, upon the application of a creditor or the debtor, to issue a letter of request to a foreign court requesting that the Jersey company be placed into a foreign insolvency process, including administration proceedings in England or Scotland (see Representation of Barclays Bank Plc re Marketgait Property Investment Limited [2026] JRC 096, amongst others).
Although this provides a way to assist Jersey companies in the absence of a domestic administration procedure, it required a formal application to the Royal Court and became a complicated and costly process which inevitably would often result in delay, at a juncture when time was of the essence for the company in financial distress. It also depends on the foreign court actioning the letter of request and although this was highly likely it was not a certainty.
With the introduction of a domestic Jersey administration procedure, creditors and debtors should no longer need to invoke the letter of request procedure to send Jersey companies into a process abroad, which should streamline matters and reduce costs overall.
Key features of the new administration process
A key feature of the new administration regime in Jersey is its alignment with the well-established English administration procedure under the Insolvency Act 1986.
Entry into administration
Article 143D of the Companies Law enables the Royal Court to make an administration order where:
- the company is or is likely to become insolvent; and
- administration is likely to achieve either rescue of the company or the whole or any part of its undertaking as a going concern, or a more advantageous realisation of the company's assets than would be achieved by a winding up.
Applications may be brought by the company, creditors with liquidated claims, a liquidator or provisional liquidator or (in limited cases) the Minister. In the case of an incorporated cell company, the cell can apply (and vice versa).
Status and powers of the administrator
An administrator (a qualified insolvency practitioner) is appointed by the Royal Court to take control of the company’s affairs.
The administrator powers are conferred by Schedule A1 to the Companies Law. The administrator in practice displaces the board's management, and their powers include, amongst others, the power to:
- to carry on trading, sell assets or effect a full business sale; and
- to compromise claims and liabilities.
It is noted that the office holder acts as agent of the company, not the Royal Court.
Moratorium - but not for secured creditors
Pursuant to Article 143G of the Companies Law, on the making of an administration order, a statutory moratorium applies, including:
- dismissal of any pending application for a company's winding up;
- restrictions on the commencement or continuing of proceedings, which is subject to the consent of the administrator or leave of the Royal Court; and
- a prohibition on passing a resolution for a company's winding‑up or order that the property of the company be placed en désastre.
However, under the Jersey administration regime, secured creditors remain free to enforce their security despite the administration. This is a critical point of difference from the English model and is expected to shape how administrations are run.
The definitions of "secured creditor" and "security" have been prescribed by the Ministerial Order. A secured creditor means a person with security over the whole or part of the assets of a company. This is irrespective of:
- whether the security was taken before or after the coming into force of Part 20B;
- where the secured assets are situated; and
- the governing law of the security.
The definition of "security" is very broad, and includes any mortgage, charge, hypothec, pledge or other interest in property that secures payment or secures performance of an obligation, including a security interest. It does not however extend to hire-purchase agreements, conditional sale agreements, chattel leasing agreements or retention of title agreements.
As a result of the exceptions for secured creditors, administrators will need to engage early with secured creditors and outcomes are likely to be creditor‑driven in leveraged structures.
Creditor process and Royal Court oversight
The framework includes:
- early creditor engagement, including an initial meeting of creditors (Article 143I);
- a requirement for a statement of affairs (Article 143J); and
- the ability for stakeholders to seek relief where unfair prejudice arises (Article 143Q).
In terms of the latter, there is a statutory safeguard under Article 143Q to ensure that, directors or members of a company or any creditor thereof can apply to the Royal Court on the ground that actions of the administrator are unfairly prejudicial to it.
The Royal Court therefore retains a supervisory jurisdiction, including the ability to vary or terminate the administration or transition the company into a winding up.
How administration fits with existing remedies
Administration will sit alongside:
- creditors’ winding up under the Companies Law; and
- désastre under the Bankruptcy (Désastre) (Jersey) Law 1990.
In practice, administration is likely to be deployed where there is enterprise value to preserve, a controlled sale process is desirable, or a short-term moratorium may allow a restructuring to take place.
By contrast, désastre and winding up will remain the primary tools for terminal insolvency.
Points to note for:
Secured creditors
- rights to enforce security remain intact;
- expect greater engagement with office holders; and
- intercreditor dynamics continue to be key
Sponsors and investors
- administration introduces a formal "rescue wrapper" for distressed exits; and
- may facilitate pre‑pack or accelerated sale processes involving Jersey vehicles.
Directors
- earlier consideration of administration may be appropriate where insolvency risk emerges; and
- boards engaged in informal "work‑out" processes should also consider administration where appropriate.
Contractual counterparties
- contractual positions should be reviewed for insolvency triggers and enforcement rights, particularly given the limited scope of the moratorium.
What should you do now?
We recommend:
- reviewing financing documents to consider how administration interacts with enforcement provisions;
- identifying Jersey holding or issuer vehicles where administration could become relevant;
- considering whether distress policies (for sponsors or lenders) should be updated; and
- monitoring early cases, which are likely to shape practice quickly given the Royal Court’s central role.
Jersey’s new administration regime marks a major shift in restructuring options. Whether you are a lender, investor, director or counterparty, our team is ready to help you assess the implications and take proactive steps. Contact us to discuss how this change may affect you.
