Yesterday, the ECSC Court of Appeal set aside the winding up order made in the case of Westford Special Situations Fund Ltd. v. Barfield Nominees Limited and another, and dismissed the Joint Liquidators appointed over the fund.
Westford was put into liquidation earlier this year by shareholders whose application was based on their entitlement to unpaid redemption proceeds. At first instance the application was allowed and Joint Liquidators were appointed over the Fund on two grounds:-
The provisions of Part IX of the BVI Business Companies Act, 2004 (as amended,1 the Companies Act) deal with corporate reconstructions, specifically:
- mergers;
- consolidations;
- sales of assets;
- forced redemptions of minority shareholders;
- arrangements; and
- provisions dealing with dissenting members.
The British Virgin Islands has opened a new Commercial Court which will specialise in cross-border commercial and insolvency matters. In two ceremonies earlier this month, the government of the BVI formally opened the court and signed a memorandum of understanding with the Eastern Caribbean Supreme Court (ECSC) for its operation and administration.
A recent application to the British Virgin Islands courts has sought to blur the lines between directors’ general duties to act for the benefit of an insolvent company’s creditors, and the statutory clawback associated with unfair preferences entered into in the twilight period prior to a company going into liquidation.
In recognition of the new BVI Commercial Court, Harneys is publishing quarterly Commercial Court case notes which summarise some of the more important judgments delivered by the Court.
Appropriation
The facts behind Mr. Justice Lewison’s recent judgment in Stanford (STANFORD INTERNATIONAL BANK LIMITED [2009] EWHC 1441 (Ch)) have no direct connection with either the British Virgin or Cayman Islands but lawyers there do have particular reason to note the more general principles around the seemingly vexed but important issue of COMI in the context of multi-jurisdictional insolvency.
The UNCITRAL Model Law on Cross-Border Insolvency is designed to supplement States' insolvency laws with a framework to address cross-border insolvency proceedings.
The Federal Court decision of Crumpler (as liquidator and joint representative) of Global Tradewaves Ltd (a company registered in the British Virgin Islands) v Global Tradewaves (in liquidation), in the matter of Global Tradewaves Ltd (in liquidation)[2013] FCA 1127 provides an illustrative example of the way that cross border insolvency recognition can be used to aid a foreign administration.
Facts
国内手続
Is it possible for a debtor company to issue debt (such as bonds) and contractually agree for that debt to rank lower in priority than debts owed by a company to other unsecured creditors? This article examines the commercial uses of subordinated debt agreements, and considers how courts in the offshore jurisdictions of the British Virgin Islands, the Cayman Islands and Bermuda would treat a subordinated debt agreement in a winding-up.