[2009]JRC126
royal court
(Samedi Division)
23rd June 2009
Before : |
J. A. Clyde-Smith, Esq., Commissioner and Jurats Le Brocq and Clapham. |
Between |
The Governor and Company of the Bank of Ireland |
Representor |
And |
(1) First Orion Amber Limited |
|
And |
(2) First Orion Amber nominees Limited |
Respondents |
IN THE MATTERS OF FIRST ORION AMBER LIMITED AND FIRST ORION AMBER NOMINEES LIMITED
AND IN THE MATTER OF AN APPLICATION TO ISSUE A LETTER OF REQUEST
Advocate A. D. Hoy for the Representor.
judgment
the COMMISSIONER:
1. The Representor is the major creditor of two Jersey companies ("the companies"), whose principle asset is a lease-held property situated in London ("the property") charged to the Representor. The companies are by their own admission, insolvent. The Representor has appointed Jane Moriarty and Myles Halley as fixed charge receivers, ("the Receivers") to the Property. The Representor is owed £18,571,721. There are Jersey based unsecured creditors owed £46,750.38 of which £7,000 is due to Jersey Income Tax ("the Controller") under an estimated assessment and there are English based unsecured creditors owed £686,201.57. The only other asset is a local bank account in Jersey with approximately £100,000.
2. The Representor has been advised that the sale of the property is unlikely to realise sufficient value at present indeed, apparently it will realise as little as £6 million, and that it would be prudent and more beneficial to the creditors to hold the property pending an upturn in the market. During this time the property could be refurbished either as an office or hotel development, the latter being the preferred option. Placing the companies into administration would best enable these strategies to be achieved.
3. Administration is not available under Jersey law and accordingly the Court is requested by the Representor to issue a Letter of Request to the High Court of Justice of England and Wales requesting it to make an administration order in relation to the companies under the provisions of the Insolvency Act 1986. The application was supported by an Affidavit by the Solicitor of the Representor and the opinion of Counsel to the effect that the High Court would readily accede to such a request.
4. As mentioned, one of the Jersey creditors, namely the Controller of Income Tax has a priority claim under Jersey Law. The Letter of Request will therefore ask for administration orders only on condition that the administrators are directed to give priority creditors under Article 32(1)(b) and (c) of the Bankruptcy Desastré (Jersey) Law 1990 the same priority status as priority creditors under English law. English counsel has further advised that the High Court would have little difficulty in complying with such a request.
5. The Jersey creditors and the companies have been convened. We have received a letter from Bedell Cristin, acting for the companies and for Capita Fiduciary Group, who rest on the wisdom of the Court. The Controller of Income Tax has no observations but points out that the claim for £7,000 is an estimated claim which is currently subject to appeal pending the filing of accounts and Mr Brawm of BDO has appeared and whilst understandably wanting his companies' debt to be paid as soon as possible, accepts the reality of the position.
6. The application follows a well trodden path, see In re OT Computers Limited 2002/29 and we have no doubt that it is in the interest of the creditors to request that the companies be placed in administration by the English court pursuant to the Insolvency Act 1986.
7. We accordingly grant the application and the Letter of Request which has been filed with us in draft is approved and will be issued in those terms.
Authorities
Insolvency Act 1986.
Bankruptcy Desastré (Jersey) Law 1990.
In re OT Computers Limited 2002/29.