Royal Court authorises a 'pre-packaged' sale pursuant to Article 155 of the Companies (Jersey) Law 1991
The Royal Court has, for the first time, authorised liquidators to enter into a ‘pre-packaged’ sale under Article 155 of the Companies (Jersey) Law 1991. In doing so, the court noted the risks involved with ‘pre-pack’ sales and stressed that it was not directing the liquidators to enter the ‘pre-packaged’ sale (whether or not the sale was in the interests of the creditors was a decision to be made by the liquidators) but merely authorising them to do so under the law.
The case concerned a group of companies involved in retail in Jersey (the Collections Group) that, due to poor trading conditions, were insolvent on both a cashflow and balance-sheet basis. The Collections Group had substantial liabilities to banks, suppliers, the tax authorities, landlords and employees, the upshot of which being that if the order requested from the court was not made the Collections Group would have had to cease trading immediately, with limited recoveries for any creditor…
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