Earlier this year the Committee to Strengthen Singapore as an International Centre for Debt Restructuring (the "Committee") published, and the Singapore Ministry of Law accepted, recommendations aimed at enhancing Singapore's position as a `lead centre' for international debt restructuring. Is Singapore now well-positioned to become Asia Pacific's debt restructuring hub?

Background

Introduction

On 25 July 2016, the White & Case team obtained, at the Supreme Court of the Russian Federation (the "Supreme Court"), a declaration that a secured creditor has the right to reduce, at its discretion, the amount of a secured claim during receivership and, as a consequence, the right to vote at meetings of the debtor's creditors.

This is a short guide to solvent voluntary liquidations of companies incorporated in the British Virgin Islands. It is not intended as a substitute for full legal advice but more as an aide memoire to the procedures involved.

1. Why is the company being put into solvent voluntary liquidation/being "wound up"?

A BVI company generally has no limit on its duration. However, like all good things, a company may come to the end of its useful life. This may be because the assets it held have been transferred out or sold.

On 3 June 2016, the Hong Kong Government gazetted the Companies (Winding Up and Miscellaneous Provisions) (Amendment) Ordinance 2016 (“Amendment Ordinance”). The date of commencement of the Amendment Ordinance will be appointed by the Secretary for Financial Services and the Treasury by notice published in the Gazette.

Background

After the decision of the Privy Council in April 2014, the Fairfield Sentry saga continued recently with the new judgment of Justice Leon concerning the status of related US Bankruptcy Court proceedings.

Facts

Introduction

Although the wishes of the majority of creditors (whether in number or by value) is an important factor in many decisions made in insolvency proceedings, the court retains discretion regarding whether a company should be placed into liquidation.

Introduction

The British Virgin Islands' reputation as the leading offshore jurisdiction is well earned and it is dedicated to maintaining its status as a creditor-friendly and commercially flexible jurisdiction. The developments of 2015 are the latest example of its evolution as it continues to meet the needs of the global financial community. The following are the key developments to BVI law that are most likely to interest lenders and borrowers.

In our recent note “Treatment of senior unsecured debt in European leveraged finance transactions: the need for an intercreditor agreement”, which can be viewed here, we addressed the increase in flexibility in European financings to incur senior unsecured debt and the risk that the lack of any agreed intercreditor arrangement may impair senior secured lenders’ ability to realise recoveries from a European Credit

The judgment of Snowden J. in the adjournment of the convening hearing relating to a scheme of arrangement (the “Scheme”) proposed by Indah Kiat International Finance Company B.V. (“Indah Kiat”) emphasises some important points that must be borne in mind by debtors, investors and advisers when preparing for a scheme, such as the importance of allowing sufficient time for preparation of all relevant supporting evidence and documentation, and allowing for a realistic notice period for creditors.

Introduction

Recently, the British Virgin Islands has seen a trend wherein debtors involved in winding-up proceedings have sought to identify what appear to be spurious disputes and then to rely on arbitration clauses in order to strike out or stay the winding-up proceedings. While this tactic could be regarded as capitalising on the wider global trend towards giving absolute primacy to arbitration agreements, it is often deployed to buy time for debtors and frustrate creditors that are legitimately seeking to wind up insolvent companies.