Bedell Cristin Guernsey Insolvency “First”
11 June 2014
The Royal Court of Guernsey has delivered a landmark ruling in the matter of Esquire Realty Holdings Limited on 16 April 2014. This was the first occasion upon which the Guernsey Courts have had to consider an application for a company to be placed into administration in the context of an intended pre-packaged sale by the administrators of the company’s assets immediately thereafter (commonly known as a "pre-pack").
In his judgment the Bailiff, Richard Collas, provided important guidance as to the type of information that the Court would consider necessary for practitioners to place before the Court when considering such applications. In addition, judicial comment was made as to the importance of making of privacy orders in relation to such applications in order to protect sensitive and confidential commercial information and to reduce the risk of distress to those who might otherwise be affected by news of insolvency events - orders commonly used in trust matters but not used often in the corporate context.
Alasdair Davidson, assisted by Jon Barclay, led the Bedell Cristin litigation team in presenting the application working with leading international practice Hogan Lovell International LLP. Alasdair noted that;
"this groundbreaking judgment demonstrates the flexibility of the Guernsey insolvency jurisdiction and the ability of the Guernsey Courts to deal with important commercial matters in a pragmatic fashion whilst taking into account the sensitivities surrounding relevant stakeholders. The Court has provided important guidance to practitioners as to the information that will be required when considering future pre-pack administrations ensuring that the interests of all creditors are properly taken into account to ensure that the advantages of a pre-pack process cannot be abused by the unscrupulous."
In this particular application the insolvent company was at the apex of a wider health care group which, by bed space alone, was one of the top 10 providers of care to the vulnerable and elderly in the United Kingdom. When it came to the interests of the group's clients Alasdair noted "the Court was especially concerned to consider the interests of those receiving care in the Group's facilities and expressly took into account matters including the continuity of care to approximately 3,200 service users not to mention the 5,000 staff who all constituted stakeholders relevant to the exercise of the Courts discretion".
In addition to this first pre-pack in Guernsey the Bedell Cristin insolvency team represented the liquidators appointed in Jersey's first pre-pack administration as well. Members of the award winning team are recognised consistently for being leaders in their field in the Channel Islands.
For further information please contact Alasdair Davidson on 01481 812819 or firstname.lastname@example.org