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Guernsey's Commerce & Employment Department has announced that it will be pursuing a number of significant changes to the island's Insolvency laws.
The proposals, which will form the basis of a recommendation to be made to the States of Deliberation, follow a year-long consultation involving industry, practitioners and members of Guernsey's insolvency law working-party.
The recommended changes include:
Introduction of insolvency rules, to address procedural aspects of practice, overseen by a standing rules committee that will include practitioners.
Introduction of general objectives for liquidators including a requirement to undertake duties in a reasonable and efficient manner.
Requirement for consultation with creditors during liquidation and administration.
Requirement for the appointment of an independent liquidator in an insolvent voluntary liquidation.
Establishing a set proof of debt procedure, giving liquidators the power to determine creditor claims, while providing a route for creditors to challenge such decisions.
Giving administrators the power to make distributions to creditors and allowing administrators to apply to dissolve the company.
Increased statutory powers for liquidators and administrators to compel the provision of documents and information from directors and other parties.
Introduction of undervalue and extortionate credit transaction avoidance claims in similar terms to s238 and s244 of the Insolvency Act 1986.
Mourant Ozannes Partner and insolvency working-party member, Abel Lyall said: "The proposed changes, once implemented, will be a major step in the further modernisation of Guernsey's insolvency law. The introduction of formal insolvency rules will add much greater clarity and certainty to insolvency practice, while creditors will warmly welcome greater consultation and additional powers for liquidators to pursue those who have caused the company loss."
