Appleby Jersey Acts in First Winding up of a Limited Partnership

Thursday 29 November 2018

Appleby acts in first winding up of a limited partnership by the Royal Court of Jersey under the Limited Partnerships (Jersey) Law 1994.

In Representation of Private Equity Fund Finance Limited [2018] JRC 194, the Royal Court of Jersey has for the first time made orders to bring about the orderly winding up of a Jersey limited partnership under Article 23 of the Limited Partnerships (Jersey) Law 1994 (the Law).

The limited partnership involved had been established in 1997 to invest in early-stage European medical ventures. A Jersey incorporated company named Renaissance Partners Limited was the General Partner. By the time the matter came before the Court, there were four limited partners remaining, including the Applicant (which had been the largest capital contributor to the limited partnership).

The General Partner was struck off the register of companies on 1 October 2016 for failure to file its annual return. As the Court observed, the directors of the General Partner had apparently been assured that non-payment of the annual return fee ‘would result in the company going into a state of suspension, from which it could be revived at a later date on payment of a modest fine’. In fact, pursuant to Article 24 of the Law, the effect of the General Partner being struck off was the dissolution of the limited partnership. Upon dissolution, the assets were arguably bona vacantia and therefore escheated to the Crown.

The Applicant had reached an agreement with HM Receiver General for the assets to be returned to the custody of the Applicant, subject to payment of a fee on a time-costed basis (and to a cap of 5% of aggregate value). This enabled the assets of the dissolved limited partnership to be collected in and dealt with, without the expense of seeking to restore the General Partner to the register. In a decision which demonstrates a typically practical and commercially-minded approach, the Court blessed this agreement and made orders authorising the Applicant to collect in, realise and distribute the assets of the partnership. In the event that the assets proved insufficient to pay all creditor claims in full, the Applicant was ordered to return to Court for further directions prior to making any distributions.

Appleby Jersey Partner Michael Cushing and Associate Craig Campbell acted for the Applicant in this matter.

 
Appleby

Elinor Brown

Business Development and Communications Executive at Appleby

Email the author: EBrown2@applebyglobal.com

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