Overview

In a recent case, the High Court held that the purported out of court appointment of administrators over a Guernsey-registered limited partnership was void because the appointor used the incorrect form when giving notice of its intention to appoint.

Kaupthing Capital Partners Master LP (Master) was a limited partnership which was registered and ostensibly had its principal place of business in Guernsey. Master formed part of an investment fund established by the Icelandic bank Kaupthing Bank and was administered by an English-registered limited partnership acting as general partner. In addition to the GP, four limited partnerships were members and investors of the fund. The investors were various other Kaupthing entities. Master was financed, in part, by a facility in the amount of £67 million provided by Kaupthing Banque Luxembourg (KB Lux).

KB Lux made a written demand on Master for repayment of the facility. Master did not have sufficient funds to pay the amount due under the facility and was insolvent in the sense that it was unable to pay its debts as they fell due. The GP purported to appoint English law administrators to Master, using the out of court procedure available under Schedule B1 to the Insolvency Act 1986.

In this briefing, we take a closer look at the issues and assess the decision of the court.

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