The just and equitable winding up jurisdiction in Jersey: loss of substratum

In an article first published in the Global Restructuring Review, Stephen Alexander and Chazha Hick have explored, by reference to some developing Jersey law, one of the most important grounds upon which a just and equitable winding up petition is ordered, namely, a loss of substratum.

The article explains how the Jersey courts have taken a commercially flexible, yet rigorous approach when considering applications to wind up a company on the ground of loss of substratum.

Examining the recent cases of Draganfly Investments Limited [2020] JRC 103, Representation of Lydian International Limited [2020] JRC 207 and Kenneth Frank Gibbons v Monarch Investments Limited and Robert Allen Gibbons [2016] JRC 140, the article demonstrates that while the jurisdiction under article 155 of the Companies Law is wide, the courts will need to be satisfied that that the original purposes of the company have been fully achieved or may no longer be pursued before concluding that it is just and equitable that the company be wound up. However, every case will be considered on its merits and in circumstances where the company is insolvent, the interests of creditors will be paramount.

GRR subscribers can read the article in full here.