In Servis-Terminal LLC v Drelle [2025] EWCA Civ 62, the English Court of Appeal held that a bankruptcy petition cannot be presented based on an unsatisfied foreign judgment where the foreign judgment has not been recognised in that jurisdiction. This update considers the effect that decision may have on statutory demands and applications for the appointment of liquidators based on unrecognised foreign judgments in the British Virgin Islands.
The Hierarchy of the Courts of the Eastern Caribbean
The court-fashioned doctrine of "equitable mootness" has frequently been applied to bar appeals of bankruptcy court orders under circumstances where reversal or modification of an order could jeopardize, for example, the implementation of a negotiated chapter 11 plan or related agreements and upset the expectations of third parties who have relied on the order.
In the recent British Virgin Islands (BVI) case of Parles AS & Daniel Perner v Winsley Finance Limited (BVIHCM2022/0123, 29 March 2023), the Honourable Madam Justice Mangatal granted an application brought by two unsecured creditors for a Chabra freezing injunction against a BVI company in aid of foreign insolvency proceedings in Czechia. In this article, we look at the reasoning employed by the BVI Court in reaching its decision and consider the wider significance of the judgment to insolvency practitioners and creditors dealing with assets in the BVI.
The question of whether a British Virgin Islands Court can order the examination of foreign persons in the liquidation of BVI companies has been the subject of two recent conflicting decisions of the Commercial Division of the High Court. As such, the answer to the question is likely to remain uncertain until it has been resolved by the Eastern Caribbean Court of Appeal.
The Statutory Framework
Section 284 of the Insolvency Act, 2003 provides that:
Two decisions handed down on the same day – one by the Eastern Caribbean Court of Appeal and the other by the Commercial Division of the High Court – illustrate the approach of British Virgin Islands Courts to applications to appoint liquidators in circumstances where the subject matter of a dispute as to the existence of a debt falls within the scope of an arbitration agreement.
Introduction
To promote the finality and binding effect of confirmed chapter 11 plans, the Bankruptcy Code categorically prohibits any modification of a confirmed plan after it has been "substantially consummated." Stakeholders, however, sometimes attempt to skirt this prohibition by characterizing proposed changes to a substantially consummated chapter 11 plan as some other form of relief, such as modification of the confirmation order or a plan document, or reconsideration of the allowed amount of a claim. The U.S.
In two relatively recent but unrelated decisions, the Eastern Caribbean Court of Appeal has provided helpful guidance in relation to how the Court ought to deal with an application for the appointment of a liquidator in circumstances where the company asserts a cross-claim in an amount exceeding the applicant's debt.
Introduction
One year ago, we wrote that, unlike in 2019, when the large business bankruptcy landscape was generally shaped by economic, market, and leverage factors, the COVID-19 pandemic dominated the narrative in 2020. The pandemic may not have been responsible for every reversal of corporate fortune in 2020, but it weighed heavily on the scale, particularly for companies in the energy, retail, restaurant, entertainment, health care, travel, and hospitality industries.
In 2019, the U.S. Court of Appeals for the Second Circuit made headlines when it ruled that creditors' state law fraudulent transfer claims arising from the 2007 leveraged buyout ("LBO") of Tribune Co. ("Tribune") were preempted by the safe harbor for certain securities, commodity, or forward contract payments set forth in section 546(e) of the Bankruptcy Code. In that ruling, In re Tribune Co. Fraudulent Conveyance Litig., 946 F.3d 66 (2d Cir. 2019), cert. denied, 209 L. Ed. 2d 568 (U.S. Apr.