Currently, the British Virgin Islands has no legislative framework for regulating third party litigation funding. Until recently, the absence of such a framework led many to believe that the rules against maintenance and champerty still operated so as in practice to prevent litigants from raising funds from third parties to prosecute or to defend claims. In Crumpler v Exential Investments Inc (BVIHC(COM) 2020/0081; 29 September 2020) Jack J clarified that third party funding arrangements were enforceable in the BVI.
Facts
Insolvency Act 2003
Comment
In the Three Arrows case,(1) the BVI Court has endorsed what is believed to be its first extra-territorial order summoning directors of a BVI company (in liquidation) to appear for private examination by joint liquidators.
Introduction
Where a British Virgin Islands company is struck off the register, its directors and members cannot carry on the company's affairs, commence or defend legal proceedings in the name of the company, or deal with the assets of the company.
Introduction
Ruling overturns New York decision rejecting market-based approach.
Key Points:
• Court of Appeals for the Second Circuit requires courts to consider efficient market interest rate, if available, for purposes of chapter 11 “cramdown.”
• Second Circuit decision overturns lower court ruling that used “formula approach” to determine appropriate chapter 11 cramdown interest rate.
Second Circuit’s reversal of controversial restructuring decision may boost confidence among distressed bond issuers.
Bankruptcy Court reinforces importance of parties’ intent in determining the nature of overriding royalty interests under state law.