AAA Holdings LImited [2009] JRC 110 (04 June 2009)

AAA Holdings LImited [2009] JRC 110 (04 June 2009)

In the absence of a liquidation committee or meeting of creditors, creditors should ordinarily be notified and given an opportunity to be heard before the court sanctions a compromise under Article 170 of the Companies (Jersey) Law 1991, unless impracticable. The court will direct what information is to be provided to creditors to enable them to understand the compromise and the reasons for it.

Citation
[2009] JRC 110
Parties
Company in Liquidation: AAA Holdings Limited; Claimant Against Company: First Respondent; Claimant Against Company: Second Respondent; Creditors: Other Creditors; Applicant/liquidators: Liquidators of AAA Holdings Limited
Jurisdiction
Jersey
Judgment Date
04 June 2009
Procedural Posture
Ex Parte Application by Liquidators for Court Sanction of Compromise / Application for Sanction Under Article 170 of the Companies (jersey) Law 1991
Outcome
Application for sanction adjourned to allow notification of creditors; compromise subsequently sanctioned as no creditors wished to be heard.
Legal Topics
Liquidation, Compromise of Claims, Creditors' Rights, Court Sanction of Liquidator Actions
Insolvency Company Law Liquidation Compromise of Claims Creditors' Rights Court Sanction of Liquidator Actions

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Parties

AAA Holdings Limited

Company in Liquidation

First Respondent

Claimant Against Company

Second Respondent

Claimant Against Company

Other Creditors

Creditors

Liquidators of AAA Holdings Limited

Applicant/liquidators

Procedural Posture

Ex Parte Application by Liquidators for Court Sanction of Compromise / Application for Sanction Under Article 170 of the Companies (jersey) Law 1991

Legal Issues

  1. 1 Whether creditors must be notified and given an opportunity to be heard before court sanctions a compromise under Article 170 of the Companies (Jersey) Law 1991
  2. 2 What information should be provided to creditors in such applications

Ratio Decidendi

In the absence of a liquidation committee or meeting of creditors, creditors should ordinarily be notified and given an opportunity to be heard before the court sanctions a compromise under Article 170 of the Companies (Jersey) Law 1991, unless impracticable. The court will direct what information is to be provided to creditors to enable them to understand the compromise and the reasons for it.

Court Disposition

Application for sanction adjourned to allow notification of creditors; compromise subsequently sanctioned as no creditors wished to be heard.

Orders

  • Liquidators to notify other creditors in writing of the proposed compromise and give them opportunity to be heard.
  • Other creditors to be provided with pleadings and affidavits (without exhibits) but not legal advice; liquidators to summarise proposed compromise and reasons for recommendation.