Isle of Man: Administration In The Isle Of Man?

Last Updated: 20 April 2014
Article by Mark Holligon

On the 6th March 2014, Mann J placed Gulldale Limited into administration in England. In so doing, Gulldale became the first Isle of Man incorporated company with the centre of main interest in the Isle of Man to be placed into administration in England.

Mann J was acting upon a Letter of Request issued by the Isle of Man High Court of Justice, received under section 426 of the Insolvency Act 1986. Capita Asset Services (London) Limited applied to the Isle of Man High Court for a Letter of Request to be issued to the High Court of England and Wales seeking that the English Court make an administration order over Gulldale under the Insolvency Act 1986.

Capita, the special servicer appointed by the principal secured creditor of Gulldale, argued that the company was unable to pay its debts and therefore required an insolvency procedure to be put in place to protect and manage the assets of the company for the benefit of its creditors, and that administration was, in all the circumstances, the most appropriate process given the location of the assets and the company's creditors. There is no administration procedure in the Isle of Man and therefore the only possible way Gulldale could benefit from the administration process would be for the Court in the Isle of Man to issue a letter of request to the English Court pursuant to its inherent jurisdiction.

Gulldale formed part of a commercial property structure which owned a number of large properties in the City of London. The beneficial interest in the properties was held by Gulldale, the legal interest was vested into English companies. The structure had been financed by lending from English institutions which were secured over the properties in England. At the time of Capita's application, the loan was in default, receivers had been appointed over the properties and the two English companies in the structure had been placed into administration. It was considered by the administrators appointed over the English companies, that if Gulldale was placed into liquidation in the Isle of Man, it would be detrimental to the realisation strategy. As an Isle of Man company whose centre of main interests was in the Isle of Man, Gulldale did not qualify as a "company" under Schedule B1 of the Insolvency Act 1986. In the circumstances, the English court had no power (in the absence of a Letter of Request from the Isle of Man Court) to make an administration order over Gulldale.

Previously the Isle of Man Court had sought assistance from the English court to apply an insolvency procedure not available under Isle of Man insolvency law in the case of Television Trade Rentals Ltd., In re, English Ch. D., February 19th, 2002 by issuing a Letter of Request to the English High Court requesting that two Manx companies be made subject to a company voluntary arrangement procedure available in England under Part 1 of the Insolvency Act 1986. In that case, the Isle of Man Court determined that it had jurisdiction under the common law to issue such a Letter of Request in the same way as it does to act upon an incoming Letter of Request as it did in the case of Impex Services Worldwide Limited 2003-05 MLR 115.

The case of Trade Rental Television demonstrated that the Isle of Man Court was prepared to request the English court to apply insolvency procedures to an Isle of Man company, which were not available within the Isle of Man jurisdiction. Such request issued by the Isle of Man court cannot be said to be simply a case of forum shopping. The Isle of Man Court will not be prepared to accede to a request that it issues a Letter of Request for assistance from a court where there is not a significant connection between the Isle of Man company and the foreign jurisdiction. In the Gulldale case, whilst the company's centre of main interest was in the Isle of Man, it had significant connections in England; its assets and creditors were situated in England as were its subsidiary companies which had already been placed into administration.

Once satisfied that Gulldale had sufficient interest in England and that issuing the Letter of Request was in the best interests of the company, its creditors and the public, Deemster Doyle issued the Letter of Request stating that he could see the real practical advantages in proceeding via the English administration route. He noted that Manx law did not make provision for the flexibility offered by the English administration process and expressed the hope that the issuing of a Letter of Request would facilitate the most efficient and effective administration of Gulldale's assets in the best interests of all concerned. Indeed, it is clear that in applying his discretion, Deemster Doyle was particularly conscious of the principles of comity and the interests of the island in terms of its external reputation.

Gulldale is a further example of the Isle of Man Court's willingness, in circumstances where it would appear to be to the greatest benefit of all parties concerned, to reach outside its shores and take advantage of the more modern rescue insolvency remedies which are now well established in England and indeed other foreign jurisdictions. One could argue that the main distinction between the insolvency regimes in the Isle of Man and England in the modern era, has been the lack of an administration process in the Isle of Man.

Isle of Man Insolvency Law is governed by the Companies Act 1931 and the Winding Up Rules 1934. The insolvency statutory provisions set out in the said legislation promote the traditional insolvency law principles of winding up a "failed" company, rather than the more modern approach of rescuing that "failed" company introduced by the Insolvency Act 1986. With foreign jurisdictions having developed their insolvency regimes to now arguably be more focused on rescue than liquidation it was perhaps inevitable that the Isle of Man Court would, in default of statutory provision, exercise its inherent discretion to reflect such a movement, albeit only in circumstances where the rights of secured creditors are unaffected.

There are various examples in recent years of the Isle of Man Court's evolving approach from viewing liquidation as being the only option for an insolvent Manx company to accepting appointments of provisional liquidators and indeed recognising the appointment of foreign administrators and examiners with the purpose of providing the Isle of Man company with an opportunity to rescue itself rather than assigning it to certain liquidation (see the case of 2e2).

As an offshore business centre, most Isle of Man companies form part of complex global corporate structures which hold assets in various different jurisdictions. It is therefore of paramount importance that should an insolvency situation arise within that structure, that the Isle of Man court does not allow the constraints of its statutory regime to prejudice the overall insolvency strategy, indeed, Gulldale should provide comfort that the court will do all it can to facilitate the global insolvency strategy, even if this means requesting that insolvency procedures not recognised within the jurisdiction be applied to the Isle of Man company.

There are currently no plans to adopt into statute administration procedures in the Isle of Man.

Article first published in International Corporate Rescue, April 2014

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions