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 Grand Court of the Cayman Islands has issued its first judgment appointing Restructuring Officers under the new section 91B of the Cayman Islands Companies Act, which came into force on 31 August 2022.

Introduction

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

Municipal restructurings pose many challenges distinct from those encountered in a typical corporate bankruptcy. One challenge frequently encountered in the context of a municipal restructuring is how to restructure municipal bonds insured by a monoline insurance company.

In January 2017, a divided panel of the United States Court of Appeals for the Second Circuit issued its widely reported opinion in Marblegate Asset Management, LLC vs. Education Management Corp., in which the majority held that the “right ... to receive payment” set forth in Section 316(b) of the Trust Indenture Act of 1939 (TIA) prohibits only nonconsensual amendments to an indenture’s core payment terms and does not protect the practical ability of bondholders to recover payment.

Background