Jersey’s new corporate administration regime

Administration provides a court-supervised mechanism 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.

Prior to the commencement of the Amendment, Jersey’s corporate insolvency framework consisted of five principal routes: désastre (under the Bankruptcy (Désastre) (Jersey) Law 1990), summary winding up of solvent companies, voluntary creditors’ winding up, court-ordered creditors’ winding up, and winding up on just and equitable or public-interest grounds. None of these mechanisms was designed specifically to facilitate rescue.

In practice, where rescue-like outcomes were required, practitioners sometimes had to rely on indirect routes, including applications on just and equitable grounds in appropriate cases and letters of request to the English High Court seeking UK administration. Those routes were not designed as a dedicated Jersey corporate rescue process. The new Part 20B regime is intended to reduce reliance on such workarounds and to provide a purpose-built alternative.

Eligibility criteria. The Royal Court may make an administration order where it is satisfied that a company is, or is likely to become, insolvent 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.

Existing insolvency procedures. An administration order may be made notwithstanding that a winding-up order has already been made or that the company has passed a resolution for a voluntary winding up. Where an administration order is made in such circumstances, the winding-up order is discharged, or the resolution for winding up ceases to have effect, subject to such terms and conditions as the court thinks fit.

While a company is in administration, no resolution may be passed, and no order may be made for the winding up of the company, nor may any order be made placing the company’s property en désastre. However, an administration order may not be made where the company is already en désastre.

Who may apply? Applications may be brought by the company itself, a qualifying creditor (with a liquidated claim against the company at or above the prescribed minimum), a liquidator or provisional liquidator, incorporated cell companies or cells of incorporated cell companies, or the Minister, where the public interest requires it. A creditor is barred from applying to the extent it has contractually agreed not to do so, or where its sole claim relates to repossession of goods.

Court powers on hearing. On hearing the application, the court retains broad discretion: it may grant or dismiss the application, adjourn conditionally or unconditionally, request further information, or convene other parties. Notice must be served on specified persons, including the company, the Viscount, relevant incorporated cell entities, and any other party the court directs, who must be given an opportunity to make representations unless the court orders otherwise.

If an order is granted, the court must appoint one or more administrators and specify the purpose the administration is to serve. The administration commences on the date of the order, and the administrator assumes management of the company’s affairs, business, and property.

The administrator acts as the company’s agent. Personal liability is excluded except where the administrator has acted fraudulently, recklessly, negligently, or in bad faith. The administrator’s properly incurred fees and expenses rank in priority over all other claims and are fixed by the court.

Key powers include:

• Taking possession of and disposing of company assets
• Borrowing on the company’s behalf and granting security
• Commencing or defending legal proceedings in the company’s name
• Continuing or winding down the company’s business
• Employing and dismissing employees
• Removing and appointing directors
• Convening meetings of members or creditors
• Transferring the company’s business or property to subsidiaries
• Compromising or settling claims
• Changing the company’s registered office and performing incidental acts

Once an administration order takes effect, a statutory moratorium arises. During this period, no resolution or order may be passed or made for the company’s winding up, no désastre order may be made, and no legal action or proceeding may be commenced or continued against the company without the administrator’s consent or leave of the court. This breathing space is designed to allow the administrator time to stabilise the business and formulate a plan without the pressure of competing claims.

A defining feature of the Jersey regime is its explicit carve-out for secured creditors. The moratorium does not prevent a person with security over company assets, whether that security was created before or after commencement of the Amendment, from:

• enforcing that security;
• exercising contractual rights under the agreement creating the security;
• making or continuing an application under Article 52 of the Security Interests (Jersey) Law 2012; or
• commencing or continuing proceedings to enforce security that takes the form of a hypothec over Jersey immovable property.

This preservation of enforcement rights reflects the existing position under Jersey creditors’ winding up and désastre regimes and underpins the island’s reputation as a predictable environment for secured lending. It distinguishes the Jersey regime from certain other jurisdictions where administration can subordinate or freeze security interests.

Within 14 days of the order (unless the court directs otherwise), the administrator must notify the registrar, the Viscount, the company, each known creditor, any relevant incorporated cell entities, and the Jersey Gazette. The administration order must also be registered by the Registrar of Companies in Jersey.

The notice provided to creditors must include an invitation to the initial creditors’ meeting and explain the purpose and likely process of the administrator. The administrator must convene an initial meeting of creditors as soon as reasonably practicable and within 10 weeks of the order date, unless the court allows a different timetable.

A statement of affairs (verified by affidavit or as the administrator directs) must be provided by the relevant persons (typically officers and those involved in the company’s affairs) within 21 days of written notice, though the administrator may extend or release this obligation. Failure by a relevant person to comply with these obligations will be an offence.

Where an administration continues beyond 12 months, the administrator must convene meetings of both the company and its creditors and present an account of the administrator’s acts, dealings, and conduct for the relevant period.

The administrator may apply to the court at any time to vary or discharge the order, and must do so if the statutory purpose has been achieved or has become incapable of achievement. On such an application, the court may make consequential orders, including directing a winding up or dissolution where appropriate.

Separately, directors, creditors, members, or other interested parties may apply to the court for relief where the administration is being, or is proposed to be, conducted in a manner that is unfairly prejudicial, or where an order is otherwise desirable or necessary.

Administration does not displace désastre or creditors’ winding up. Rather, it occupies the space between consensual restructuring (schemes and informal workouts) and terminal liquidation. By introducing a dedicated Jersey rescue process where the statutory criteria are met, it is expected to reduce reliance on less direct routes, including applications on just and equitable grounds in appropriate cases and letters of request seeking UK administration.

Secured lenders: Enforcement leverage is preserved in full, but early and constructive engagement with any appointed administrator will be important in shaping restructuring outcomes. Administration may also provide a supportive environment for pre-pack or value-preserving asset disposals.

Directors: The regime gives boards a new rescue option short of liquidation. Where solvency is in question, directors should seek professional advice promptly and ensure that their decision-making is clearly documented.

Advisers: Practitioners should expect increased demand for viability assessments, contingency planning, and cross-border coordination—particularly where security packages are complex or multi-layered.

The introduction of administration represents a material enhancement of Jersey’s restructuring landscape. By providing a dedicated, court-supervised rescue mechanism without compromising the enforceability of security interests, the Amendment reinforces Jersey’s dual commitments to modern insolvency standards and creditor confidence. The regime comes into force on 19 June 2026.