Service area / Restructuring and Insolvency

Location / British Virgin Islands

Date / February 2019

This article considers how to challenge an act, omission or decision of an office-holder.

The right to bring a challenge derives from Section 273 of the BVI Insolvency Act 2003, which provides:

A person aggrieved by an act, omission or decision of an office holder may apply to the Court and the Court may confirm, reverse or modify the act, omission or decision of the office holder.

Zone of insolvency - directors in the firing line

Happy New Year?

2018 saw a number of high profile insolvencies around the world, including in Guernsey. The climate for many sectors remains extremely challenging with the UK further hindered by continuing uncertainty around Brexit. EY's Profit Warning Stress Index hit its joint highest level for two years in the third quarter of 2018 with 68 UK quoted companies issuing profit warnings.

Last week, the United States District Court for the District of Delaware (the “Court”) reversed a 2015 decision by the Delaware Bankruptcy Court (the “Bankruptcy Court”) disallowing the portion of an unsecured claim filed by appellant Wilmington Trust Company (“WTC”) for postpetition attorneys’ fees and costs incurred under an indenture in connection with the In re Tribune Media Co. chapter 11 cases.

Indenture trustees and agents participate in the administration of chapter 11 cases in a number of ways, including by protecting holders’ rights, ensuring compliance with the applicable indenture and other agreements, and fulfilling their duties and responsibilities under applicable law.

In a recent opinion, United States Bankruptcy Judge Martin Glenn of the Southern District of New York held that Bankruptcy Courts may enter final default judgments against non-US defendants who fail to respond to a properly served summons and complaint.

The Court of Appeal of Jersey has now considered in an appeal against the Royal Court’s decision of 10 January 2018 the case of a UK trustee in bankruptcy (the “Trustee”), whose appointment had been recognised in Jersey by order of the Court and who had been authorised to obtain documents and/or information for particular purposes, who was later subject to coercive measures in his home jurisdiction requiring the disclosure of such material for different, unauthorised purposes (in this case an Information Notice issued by HMRC pursuant to Schedule 36 of the UK Finance Act 2008 (the “

In so holding, the Court sanctioned the lender’s motive of purchasing claims to block the plan for the purpose of protecting its own existing claim. The Court held that the relevant bad faith inquiry under 11 USC § 1126(e) requires a motive which is ulterior to the purpose of protecting a creditor’s economic interest in a bankruptcy proceeding.

Background

The lender held a senior lien fully secured by the debtor’s real property. The debtor’s proposed “cramdown” plan sought to extend and modify the terms of the mortgage without the lender’s consent.

The Supreme Court of Bermuda has confirmed once again its willingness to order Confidentiality Orders in cases that involve the administration of private trusts. In the 2018 case of In the Matter of the E Trust (the “E Trust”), Acting Justice, Shade Subair Williams (subsequently appointed as a Puisne Judge) reaffirmed previous rulings that private trust proceedings can be anonymized and heard privately in Chambers.

The Facts

Honorable Martin Glenn, United States Bankruptcy Judge in the United States Bankruptcy Court for the Southern District of New York (“Bankruptcy Court”) granted Avanti Communications Group PLC’s (“Avanti”) request to recognize the UK court-sanctioned scheme of arrangement and enforce the guarantee releases provided by Avanti’s affiliates on certain debt.[1]

What happens to the a licensee’s right to use a trademark if the licensor files for bankruptcy?