The adoption of new international guidelines on cross-border insolvency matters by the BVI courts has been welcomed by Ogier insolvency law specialist Nicholas Brookes.

The Judicial Insolvency Network guidelines – drafted in 2016 by ten insolvency judges from international jurisdictions, including a BVI Commercial Court Judge – aim to create co-operation and communication between courts on cross-jurisdiction proceedings, and to minimise the time and expense involved in litigation.

In June 2011, the United States Supreme Court issued its opinion in the case known as Stern v. Marshall. The U.S. Supreme Court held that filing a proof of claim in a bankruptcy case does not constitute consent to the bankruptcy court’s jurisdiction over all counterclaims or actions that the bankruptcy estate may later bring against the creditor.

In fact, filing the proof of claim constitutes consent only to those claims or actions that either (1) stem from the bankruptcy case itself; or (2) are necessary to the resolution of the creditor’s proof of claim.  

When a traditional nonbanking company files a case under the Bankruptcy Code, a judge is appointed to be the neutral arbiter of disputes that arise between the debtor and its creditors.

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