The Companies (Guernsey) Law, 2008 (Insolvency) (Amendment) Ordinance, 2020, and the Companies (Guernsey) (Insolvency Rules) Regulations, 2022, came into force on 1 January 2023, following regulations made by the Committee for Economic Development.
The island’s insolvency regime has remained largely unchanged since the introduction of the island’s Companies Law in 2008.
Ben Rhodes and Andrea Harris, insolvency practitioners at Grant Thornton, who were members of the local industry Insolvency Rules Committee, said that insolvencies were workable under the law and had been used successfully thanks to a ‘flexible and pragmatic’ court, but it was deficient in several areas.
‘These deficiencies led to uncertainty, unpredictability, and the risk of potential abuse,’ they said.
‘The ordinance and the insolvency rules represent the most significant and wide-ranging reform of Guernsey’s corporate insolvency regime since 2008.
‘A modern and effective corporate insolvency regime is vital for the financial services industry.
‘A robust and predictable insolvency regime will further enhance Guernsey’s reputation as a safe place to do business, which is especially important in these challenging global economic times.’
Reform of the local law started in 2013 and an ordinance was approved by the States in January 2020.
. Grant Thornton is hosting an event to update industry on the new laws on Wednesday. For more details contact the company direct.