A ruling by the High Court in England to recognise the provisional liquidation of a Jersey-incorporated company for the first time will provide reassurance to creditors, an expert has said.
The High Court ordered the recognition of James Pirie and Alan Roberts of Grant Thornton Channel Islands as the provisional liquidators of the Jersey-based RTI Limited on 8 September.
RTI – a subsidiary of Russian aluminium giants Rusal – had entered provisional liquidation in July after a court ordered it to pay more than €214 million in arbitration to German bank OWH
Provisional liquidation is used to safeguard company assets as an emergency insolvency procedure, aimed at protecting creditors interests when waiting for the full appointment of liquidators brings a realistic risk to company assets.
The appointment of the provisional liquidators for RTI marks the first time the Royal Court in Jersey has exercised its power to appoint them since new laws came into force on the island three years ago, and comes as the High Court looks to provide assistance to different jurisdictions over comparable insolvency proceedings.
Gemma Kaplan, a contentious insolvency expert with Pinsent Masons, said: “This decision will bring comfort to creditors and insolvency practitioners alike in relation to Jersey based companies that assets located in England and Wales can be protected by urgently appointing provisional liquidators in Jersey and applying to the High Court to have the appointment recognised, in order to prevent the dissipation of assets and allow for investigations to take place prior to the appointment of liquidators.”
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