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Jersey Unreported Judgments |
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You are here: BAILII >> Databases >> Jersey Unreported Judgments >> Representation of Ocorian Corporate Services (Jersey) Limited and Anor re Valad [2020] JRC 196 (28 September 2020) URL: http://www.bailii.org/je/cases/UR/2020/2020_196.html Cite as: [2020] JRC 196 |
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Before : |
J. A. Clyde-Smith O.B.E., Commissioner, and Jurats Ronge and Pitman |
IN THE MATTER OF THE REPRESENTATION OF OCORIAN CORPORATE SERVICES (JERSEY) LIMITED AND CIRCLE CORPORATE SERVICES (JERSEY) LIMITED
AND IN THE MATTER OF VALAD EUROPEAN DIVERSIFIED FUND (JERSEY) 11 LIMITED
AND IN THE MATTER OF VALAD EUROPEAN DIVERSIFIED FUND (JERSEY) 14 LIMITED
AND IN THE MATTER OF VALAD EUROPEAN DIVERSIFIED FUND (JERSEY) 19 LIMITED
(TOGETHER "THE COMPANIES")
Advocate E. B. Drummond for the Representors.
judgment
the COMMISSIONER:
1. The two corporate directors of Valad European Diversified Fund (Jersey) 11 Limited, Valad European Diversified Fund (Jersey) 14 Limited and Valad European Diversified Fund (Jersey) 19 Limited ("the Companies") asked the Court in the exercise of its discretion to issue a letter of request to the English High Court seeking the making of administration orders in relation to the Companies under the provisions of the Insolvency Act 1986.
2. The Companies principle assets are substantial commercial properties in the United Kingdom and they are now cash flow, if not balance sheet, insolvent. As Advocate Drummond says they have been caught in the perfect storm of Covid 19 with reduced footfall to the premises let out, non-payment of rent and inability to enforce arrears of rental.
3. The principle indebtedness is to NatWest Markets Plc and Royal Bank of Scotland Plc under a facility which is secured and cross collateralised over the assets of the Companies and there are other unsecured creditors.
4. The Companies need to be placed into a insolvency process to protect the interests of their creditors and the directors are concerned to ensure the best returns to the creditors generally. They believe the best option is a process which allows maximum flexibility and the Companies to continue trading whilst their assets are liquidated.
5. Jersey does not have such a process and the directors believe that it is in the best interests of the creditors for the Companies to be placed into administration under the Insolvency Act.
6. The Royal Court has an inherent jurisdiction to request assistance from the English High Court by way of letter of request for the purposes of placing a Jersey-registered company into administration in England. The Royal Court's authority is well-established and has been applied on a number of previous occasions - see Dessain & Wilkins, Insolvency & Asset Tracking, 5th Ed (2016), pages 328 to 331.
7. In the Representation of HSBC Bank Plc re Tambrook [2013] JRC 046 the Royal Court confirmed its jurisdiction to issue a letter of request:
8. As the power to issue a letter of request stems from the Royal Court's inherent jurisdiction, the pool of general powers that it may exercise in the administration of justice, there is no exhaustive (or closed) list of parties which may apply for the issuance of a letter of request. Applications have been made by:
(i) the debtor company: per OT Computers Limited [2002] JLR Note 10, Representation by Doltable Ltd [2005] JRC 038A; or
(ii) a creditor: per Representation of HSBC Bank Plc re Tambrook [2013] JRC046, Re Siena SARL [2015] JRC 260, Alard Investments Limited [2015] JRC 137 and Harbour v Orb [2016] (2) JLR Note 10.
9. The present application is made by the boards of each of the Companies acting by their directors and is analogous to similar applications made by debtor companies themselves. The Representors' have issued one Representation in respect of all three Companies in order to save Court time and legal costs in circumstances where the Companies are cash poor.
10. As a matter of English law, if a foreign company has its COMI in England, the English High Court has jurisdiction to place that company into administration without the need for a letter of request from the Royal Court. But if the COMI is or may be in Jersey, a letter of request is required to give the English High Court jurisdiction (per paragraph 2 of Representation by Doltable Ltd [2005] JRC 038A).
11. This was recognised by the Royal Court in Representation of RBS [2012] JRC 080:
12. There is a rebuttable presumption that a company has its COMI in its jurisdiction of incorporation, and in the present case, notwithstanding that the Companies have many connections with England (described below), there is "a real issue as to whether or not the Companies would be able to rebut the presumption that each of them has their COMI in Jersey". As the Royal Court stated in Alard Investments Limited [2015] JRC 137 at paragraph 11:
13. For the reasons set out in paragraphs 12 to 15 of the First Affidavit of Simon Burgess, and at paragraphs 7 to 11 of Hilary Stonefrost's opinion, as the Representors cannot rebut the presumption and show definitively that the Companies' COMI is in England, they accordingly seek a letter of request from the Royal Court to endow the English High Court with jurisdiction to make an Administration order in respect of the Companies.
14. In the exercise of our discretion we are satisfied that:
(i) The Companies are insolvent on a cash flow basis and probably on a balance sheet basis as well.
(ii) There is sufficient connection with the United Kingdom.
(iii) Administration is in the interest of those directly affected, namely the secured creditors and also in the interests of the unsecured creditors.
(iv) There are administrators willing to act. In this case the English Court will be asked to appoint three administrators as the three substantial properties are in three different cities.
(v) The English Court is likely to grant administration order as we advised by Hilary Stonefrost.
(vi) There are no other available Jersey procedures that would be as beneficial to the creditors.
15. The Viscount does not oppose the application and has approved the terms of the letter of request, which preserves the position of Jersey priority creditors, albeit that none are thought to exist.
16. The shareholder and creditors have all been convened to this hearing and none have raised any objection to the proposed application.
17. In all of the circumstances we think it right to make the request, the terms of which we approve.
18. Finally, Advocate Drummond informs us that the creditors will now be informed of this decision and that an application will be made to the High Court. If they need any further information they will be told to contact the English solicitors.
