How Jersey’s new administration regime will affect cross-border restructuring

Understanding Jersey’s new administration regime is essential for practitioners engaged in cross-border restructuring and insolvency situations. This article is aimed at discussing:

• Why is Jersey a significant jurisdiction?
• What is the new law?
• How do we see this being used?
• Final thoughts, and what next?

Jersey, one of the Channel Islands situated between the UK and France, is a major international financial centre and consistently ranks as one of the top global offshore jurisdictions. The professional infrastructure on the island specialises heavily in providing services in private wealth and trust administration, corporate services, and fund services, as well as banking, investment and asset management. It is a key jurisdiction for structuring alternative investment funds, including private capital, both credit and equity, real estate, and hedge funds.

It is regularly positioned as a global capital conduit and is deeply integrated with several other major financial hubs, including London’s public markets, Greater China (Shanghai and Hong Kong), the Gulf Cooperation Council hubs of Dubai and Bahrain, as well as New York and, of course, other offshore centres. Jersey has the same exposure to macro-economic headwinds facing other major financial centres: high interest rates, constrained refinancing markets and commercial real estate volatility.

What distinguishes the jurisdiction is a concentration effect: those pressures feed directly into the fund, real estate and private equity portfolios that sit at the heart of Jersey’s capital base. As those portfolios face restructuring activity, Jersey is well-placed, and now better equipped, to handle the resulting restructuring activity.

On 19 June 2026, a significant new insolvency tool became available in Jersey with the Companies (Jersey) Amendment No. 2 Law 2026 taking effect, introducing a formal corporate administration regime. Together with the introduction of modernised liquidation procedures in 2022, Jersey is demonstrating its commitment to meaningful and continued restructuring and insolvency participation and reform.

Up until these changes, where rescue like outcomes were required, practitioners sometimes had to rely on indirect routes; these included applications on just and equitable grounds in appropriate cases and the issue of letters of request to the English High Court seeking UK administration. Those routes were not designed as a dedicated Jersey corporate rescue process, whereas the new Part 20B regime is intended to reduce reliance on such workarounds and provide a purpose-built framework with consistent outcomes.

Administration provides a court-supervised mechanism (there is no out-of-court route) through which a distressed but potentially viable company can be stabilised, restructured, or sold as a going concern rather than being wound up. The regime draws on established concepts from UK law, while incorporating features that preserve Jersey’s position as a creditor-friendly jurisdiction.

Indeed, the treatment of secured creditors is a defining feature of the new regime. The moratorium protects the company against unsecured creditors (preventing winding up petitions, Désastre proceedings and the commencement or continuation of legal proceedings) but it does not bind secured creditors. Holders of security under the Security Interests (Jersey) Law 2012, hypothecs (a legal security where a creditor obtains a right over a debtor’s property to secure a debt) over Jersey immovable property, or otherwise, retain their full enforcement rights throughout the administration.

These of course, also remain subject to any contractual inter-creditor arrangements. In terms of eligibility criteria, the Royal Court may make an administration order where it is satisfied that a company is, or is likely to become, insolvent (on a cashflow basis) and that making the order is reasonably likely to achieve one of two statutory purposes:

(a) rescuing the company, or the whole or any part of its undertaking, as a going concern; or

(b) achieving a more advantageous realisation of the company’s assets than would result from a winding up.

Entities which can avail themselves of the benefit of an administration order are reasonably broad but do exclude foreign registered and protected cell companies.

The treatment of secured creditors will define how administration strategies are designed and implemented in practice. Because the moratorium does not bind them, secured lenders are central to the process from the outset, and their cooperation is a precondition for any successful outcome. It is also worth noting that the cashflow insolvency test may itself be triggered by a secured lender accelerating its debt, which could bring a company within scope of the regime.

Beyond secured creditors, the administrator will need to manage a wider stakeholder group: shareholders, associated group entities (which may be subject to their own restructuring proceedings in other jurisdictions), and unsecured creditors. Coordinating across those groups, and building sufficient consensus around restructuring proposals, will be one of the administrator’s most demanding practical tasks.

For Holdco’s and SPVs, whose assets usually comprise shares and intercompany receivables, the majority of the asset base will likely be subject to security.

This raises an interesting question about whether administration could serve as an enforcement mechanism in its own right. With court sanction and secured lender consent, an administrator could in principle deal with secured property on behalf of the company, thereby avoiding the need for the secured lender itself to assume the legal and regulatory risks of appropriating or selling the asset.

This approach would follow established UK practice and appears consistent with the policy intent behind the new regime, though it remains to be tested in the Jersey courts. On this topic, there is discussion in the local market about whether receivership (providing secured creditors with a dedicated agency-based enforcement option) may be the next step in Jersey’s insolvency toolkit. If introduced, it would sit naturally alongside administration as a complementary creditor-friendly tool.

Like the UK process, Jersey administration has the core function of providing a moratorium, giving breathing space, whilst restructuring proposals – whether for the disposal and realisation of assets, or for a compromise with creditors - can be developed. The most likely exit routes from a Jersey administration are a scheme of arrangement under Article 125 or a sale of assets, typically shares.

Where administration alone cannot drive the required level of consensus, the process will flow into Jersey’s existing scheme options. Creditors retain distinct recourse at each stage: conduct and fairness concerns can be raised through the administration itself, while objections to any financial restructuring are addressed through the scheme process in the normal course. These are separate mechanisms, not two bites at the same cherry.

In practice, Jersey administration is likely to sit alongside processes in other jurisdictions rather than operate in isolation. Drawing on experience from Hong Kong and Caribbean cross-border restructurings, the picture is rarely one-size-fits-all: sometimes a standalone local scheme and moratorium suffices; sometimes parallel schemes and moratoria are needed; we also envisage scenarios where a UK Part 26A Restructuring Plan will handle the financial creditors while the Jersey process provides the moratorium and structural protection.

The absence of a Part 26A equivalent in Jersey means that complex financial restructurings involving dissenting creditor classes may continue to require an English law process to achieve a binding cram-down.

Cross-border recognition adds another layer of complexity. Jersey has not enacted the UNCITRAL Model Law on Cross-border Insolvency as a general domestic recognition regime, although the Royal Court may, when giving insolvency assistance under Article 49 of the Bankruptcy (Désastre) (Jersey) Law 1990, have regard to the UNCITRAL Model Law to the extent it considers appropriate.

Recognition of foreign restructuring or insolvency orders in Jersey, and of Jersey proceedings elsewhere, will therefore depend on the applicable statutory route, common law and private international law principles, and the recognition rules of the relevant foreign jurisdiction. The Judgments (Reciprocal Enforcement) (Jersey) Law 1960 may assist with qualifying judgments from certain stated jurisdictions, but it is not a comprehensive regime for recognising foreign insolvency or restructuring proceedings.

Where the relevant debt is English law governed, creditors are predominantly UK-based, and there is a sufficient English connection, an English Part 26A Plan may be the principal restructuring tool, with Jersey administration potentially providing a Jersey insolvency framework and moratorium around that process. That approach will need to be tested against the administrator’s statutory powers and duties, secured creditor rights, the scope of the Jersey moratorium, and the likely recognition or effectiveness of the English plan in Jersey and any other relevant jurisdictions.

Part 20B closes a gap in Jersey’s insolvency regime which has been noticeable for some years. The jurisdiction now has a formal, court-supervised rescue procedure that is protective of secured creditors and fit for its role in international capital structures. For practitioners advising on international structures with a Jersey element, the immediate priorities are threefold:

1. understanding which entities in scope of Part 20B are now restructuring candidates
2. engaging early with secured creditors in any distress scenario
3. mapping how Jersey administration fits alongside the processes available in other relevant jurisdictions

The introduction of the administration regime is not likely to be the end of the story, with further creditor-friendly developments likely to follow. A formal cram-down mechanism on the Part 26A model appears some way off. For now, the administration regime gives Jersey something it has long needed: a clear, predictable framework for navigating distress in international capital structures.

This article first appeared in the July edition of Global Turnaround, the leading international magazine for restructuring and insolvency specialists.