The relationship between arbitration clauses and winding up proceedings is a contentious issue in many jurisdictions and the debate shows no sign of abating. In the BVI, a recent case has further clarified the effect of an arbitration agreement on creditor's winding up proceedings pursued on the basis of a company's insolvency.

O QUE É CHAPTER 11?

Statutory demands in the British Virgin Islands have long been a useful option for creditors of defaulting companies. Properly utilised, they either secure payment of the outstanding debt or provide the creditor with the benefit of a statutory presumption of insolvency to assist in their application to appoint a liquidator over the company.

Stephen John Hunt v Transworld Payment Solutions U.K. Limited (in liquidation) [2020] SC (Bda) 14 Com The Bermuda Supreme Court has clarified the rules for granting common law recognition and assistance to foreign insolvency office holders following the landmark competing Privy Council decisions of Singularis Holdings Ltd v Price Waterhouse Coopers [2014] UKPC 36 and Cambridge Gas Transportation Corporation v Official Committee of Unsecured Creditors (of Navigator Holding PLC and others) [2006] UKPC 26.

Ever since governors across the country implemented Stay at Home orders to slow the spread of COVID-19 by closing non-essential businesses, experts have debated whether a force majeure provision of a lease would excuse a tenant’s obligation to pay rent.

A company incorporated in the British Virgin Islands (the “BVI”) can be placed into insolvent liquidation either by: a shareholders’ qualifying resolution; or a court order, following an application to the court and a hearing.

The effect of an insolvent liquidation is to put the affairs of the company in the hands of an independent insolvency practitioner who is required to take possession of, protect and realise the company’s assets for the benefit of the company’s creditors.

An application to court can be made by:

The office of the Registrar of Corporate Affairs (the “Registrar”) in the British Virgin Islands (the “BVI”) has responsibility for the incorporation, striking-off and restoration of struck off companies to the register of companies (the “Register”).

Administrative strike off of a British Virgin Islands company

The Registrar may strike a company off the Register for a number of different reasons, including:

For debtors seeking to reorganize under Chapter 11 of the Bankruptcy Code, creditors with claims against reorganizing debtors, and purchasers of assets in bankruptcy court-administered sales, this alert flags seven things to keep in mind about the treatment of environmental liabilities in bankruptcy.

I. Bankruptcy Doesn’t Excuse Compliance with Environmental Rules

In the current economic climate, there is a pressing need for cross-jurisdictional co-operation when it comes to the Courts’ involvement in restructuring and insolvency proceedings. An increasing number of Hong Kong companies are finding themselves in need of urgent assistance with restructuring and insolvency processes; this requires international co-operation where, as is often the case, such companies are incorporated in offshore jurisdictions.

Carey Olsen presents this unofficial consolidation of the BVI Insolvency Act 2003 (the “Act”) and the Insolvency Rules 2005 (the “Rules”), which we hope will be of interest as a reference guide for anyone involved in cross border restructuring and insolvency.