The role and duties of company directors are well established in English law through the Companies Act and case law. These principles are widely applied in many jurisdictions, including the Bahamas, where UK cases about directors’ liability and related issues carry considerable weight.
1. The Joint Official Liquidators of FTX Digital Markets Ltd. (Brian Simms KC, Peter Greaves and Kevin Cambridge) (“the JOLS”) have entered into a Global Settlement Agreement (“GSA”) with the Chapter 11 Debtors of the FTX Companies ( approximately 130 FTX Companies which filed for Chapter 11 on 11th November 2022).
The Chief Justice of the Commonwealth of The Bahamas, Sir Ian Winder has issued Cross-Border Insolvency Practice Direction No. 14 of 2023 for Court-to-Court Communications and Cooperation in cross-border insolvency and restructuring cases after consultation with the Justices of the Supreme Court, Commercial Division.
The practice direction addresses the use and adoption of published JIN guidelines in cases pending before the Supreme Court of the Commonwealth of The Bahamas. The practice direction took effect on 19 December 2023.
Company directors owe several fiduciary duties, one of which is to act in the best interest of shareholders. But to what extent does that duty to shareholders apply in the context of the financial health of the company? The award-winning commercial and litigation lawyers at ParrisWhittaker are experienced in advising company directors on their duties, including where there are concerns around the lawfulness of paying dividends.
Stuart Cullen and Benjamin Drakes, Dentons LLP
This is an extract from the 2023 edition of GRR's the Americas Restructuring Review. The whole publication is available here.
In summary
The Supreme Court of The Bahamas has recently provided guidance on the ability and extent to which the fees and expenses of the liquidator may be paid from trust property. Such guidance has emanated from Justice Winder and Justice McKay in two separate decisions relating to Pacifico Global Advisors Limited (in liquidation) (“Pacifico”) delivered within the period of six months[1].
While the overall economic damage resulting from COVID-19 remains to be seen, one thing is certain – the pandemic has dealt a devastating blow to the global economy. Many businesses, some of which were relatively healthy pre-COVID-19, now find themselves in a liquidity crunch and at risk of insolvency.
For companies in The Bahamas facing financial distress, it is important for directors to be aware of their duties and the tools available to them, while taking steps to stabilise the company’s business.
In ZCM Asset Holding Company (Bermuda) Ltd v AWH Fund In Liquidation JCPC, the Privy Council determined that, notwithstanding the absence of express statutory provisions permitting service out of the jurisdiction of fraudulent preference claims, such claims are to have extraterritorial effect.(1)
Sophia Rolle-Kapousouzoglou, Lennox Paton
This is an extract from the 2020 edition of the Americas Restructuring Review, published by Global Restructuring Review. The whole publication is available here.
In summary
In response to the COVID-19 pandemic, the Government of The Bahamas, like many other governments, has declared a state of public emergency. In addition, the Government has issued several Emergency Powers Orders which operate to implement a temporary shutdown of all businesses (save for those providing specific essential services) and a national curfew.