Enforcement of Guernsey Security

• There are a number of pre-enforcement steps that a secured party can take to better protect its position prior to commencing formal enforcement under the law or as a means of encouraging  the security provider to discuss consensual restructuring or negotiated settlement.
  
  
• The law sets out certain requirements as to when formal enforcement can be commenced, the methods of enforcement, the duties of a secured party in enforcing and how any realised proceeds must be applied.  
  
  
• There are methods of managing the risks to enforcement posed by the insolvency of the security provider, non-compliance by counterparties and challenges to collateral valuations.

The secured lending market is very familiar with structures involving Guernsey entities, including companies, limited partnerships and unit trusts to name but a few. Guernsey continues to be a popular and commercially attractive jurisdiction in which to establish investment funds, insurance and re-insurance structures as well as real estate and general asset-holding structures. These structures and entities are often involved in secured finance transactions. This advisory looks at the process of enforcing security interests created under the SIL as well as some practical considerations for those planning or taking enforcement steps in Guernsey.

View full advisory.