The Grand Court has provided useful and important guidance on when an insolvency officer holder will be considered to be independent. This guidance reflects the continuing trend of the Grand Court taking a more commercial and pragmatic approach to the question of officeholder independence.
Global Fidelity: Past Advice to the Company and Acting as Voluntary Liquidator Does Not Automatically Lead To a Lack of Independence
In Global Fidelity Bank, Ltd the Court ordered that the voluntary liquidation of Global Fidelity Bank (the "Bank") be continued under the supervision of the Court, and that the petitioners (individuals from FFP), who had been the joint voluntary liquidators ("JVLs") of the Bank, be appointed as the joint official liquidators ("JOLs").
One of the Bank's largest creditors ("AC") had opposed the appointment of the petitioners as JOLs, on the basis they could not properly be regarded as independent as regards the Bank. The opposition was based on the fact that: (i) the petitioners had been appointed as JVLs by the Bank's directors (supported by the shareholders); and (ii) FFP had been engaged by the Bank to produce an independent financial review of the Bank (this review was based on limited financial records, was expressly not an audit, was conducted over a week and, after which, the individuals from FFP were appointed as JVLs). Another of the Bank's largest creditors had written to the Court stating that it had no objection to the petitioners being appointed...
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