Channel Islands firm Carey Olsen has scored a first by successfully persuading a Guernsey court to put a protected cell company (PCC) into administration.
John Greenfield, the senior litigation partner at Carey Olsen who led on the case, said he believed it to be the first time an application to put a PCC into administration had been successful.
PCCs, first dreamt up in Guernsey in 1997, are limited companies which have been separated into legally distinct ‘cells’ with separate revenues, assets and liabilities.
Greenfield was instructed by Zurich Insurance, a claimant for the assets of Messenger Insurance, the PCC in question. Other claimants, represented by lawyers from Baker & McKenzie, Barlow Lyde & Gilbert, Clifford Chance, Freshfield Bruckhaus Deringer, and Kendall & Freeman, supported the application.
Messenger has also been caught up in High Court litigation in London involving Cable & Wireless and several insurance firms.
Greenfield said that the case may be relevant in other jurisdictions where PCCs are permitted. He added: “This case is going to be the start of developing some jurisprudence on how PCCs are going to be treated when they get into difficulties.”
Fellow Carey Olsen partner Mark Dunster was also involved, acting for another creditor.