Onerous property definition
Onerous property is defined in Article 171 of the 1991 Law and Article 15 of the 1990 Law. The consequence of a disclaimer of onerous property would be to determine, from the date of disclaimer, the rights, interests and liabilities of the Company or ALPS 94-1, as the case may be, in or in respect of the property disclaimed, but would not, except so far as is necessary for the purpose of releasing the Company or ALPS 94-1, as the case may be, from liability, affect the rights or liabilities of any other person (which, in our opinion, would include all creditors of the Company or ALPS 94-1, as the case may be). Any person who claimed an interest in any disclaimed property (which would, in our opinion, in the case of the Company include the beneficiaries of the Security Documents pursuant to which security is, or will be, granted by the Company) may apply to the courts of Jersey for an order (which may be made on such terms as the court thinks fit) for the vesting of the disclaimed property in, or for its delivery to, such beneficiary or a trustee for such beneficiary. The power of the liquidator and the Viscount to disclaim onerous property has not to our knowledge been the subject of any Jersey judicial authority or judicial decision in the courts of Jersey. However, it should be noted that the relevant provisions of Jersey law do provide that a person sustaining loss or damage in consequence of the operation of a disclaimer (which could include creditors of the Company or ALPS 94-1) shall be deemed to be a creditor of the Company or ALPS 94-1, as the case may be, to the extent of the loss or damage and may prove for the loss or damage in a subsequent winding-up or desastre. Were a liquidator (or the Viscount) to disclaim any property of the Company on the grounds that it is onerous, it would be our opinion that an application to the courts of Jersey, of the type referred to above, by the Security Trustee (or by any beneficiary of the security granted by the Company to the Security Trustee) for the vesting of the property directly in the Security Trustee would succeed, on the basis that the property in question has been validly mortgaged or charged to the Security Trustee and the power of disclaimer should not be used in such a way as to defeat such a security.