In Morning Mist Holdings Limited v. Krys (In re Fairfield Sentry Limited), Case No. 11-4376, 2013 WL 1593348 (2d Cir.

Introduction

The recent decision in Pacific China Holdings Limited v Grand Pacific Holdings Limited, BVIHCV 2009/389 sets out the view of the BVI Commercial Court as to who, if anyone, should be responsible for the remuneration of liquidators where a liquidation order is set aside on appeal.

• In Irving H. Picard v Bernard L. Madoff Investment Securities LLC, BVIHCV 0140/2010, the trustee appointed in the liquidation of the business of Bernard L. Madoff Investment Securities LLC (“Picard” and “BLMIS”) sought, amongst other things, (i) recognition in the BVI as a foreign representative; (ii) an entitlement to apply to the BVI Court for orders in aid of the foreign proceeding; and (iii) an entitlement to require any person to deliver up to him any property of BLMIS.
• Bannister J.

On Friday 1 April, the Court of Appeal handed down its much awaited written judgment in Westford Special Situations Fund Limited v Barfield Nominees et al. The decision has far reaching consequences, not only for BVI funds, but also for all types of BVI corporate vehicles. The case directly and indirectly dealt with four major issues:-  

Trial on preliminary issues

By virtue of his appointment, a liquidator steps into the shoes of the company and so the usual contractual, tortious and equitable remedies are actionable by the liquidator, acting in the name of the company.  Claims are most likely to be based on the following:

On 16 September 2011 judgment was handed down by the BVI Commercial Court in a number of cases that have been brought by the liquidators of Fairfield Sentry Limited (“Fairfield”), a "feeder fund" into Bernard L Madoff Investment Securities Limited (“BLMIS”), against a number of investors that historically redeemed out of the fund (the "Fairfield judgment"). Subject to any appeal, the Fairfield judgment should put an end to the liquidators’ claims in the BVI.

In an application to wind up a BVI company the BVI Court re-stated the rules on when a foreign judgment creates an issue estoppel. Following The Sennar [1985] 1 WLR 490 the Court found that there would be an estoppel where a foreign judgment is (1) of a court of competent jurisdiction; (2) is final and conclusive; and (3) on the merits.

In a decision of interest in a number of jurisdictions where these types of claims have been made, the BVI Commercial Court handed down judgment today in the claim brought by the liquidators of Fairfield Sentry Limited, a BVI fund which invested in Bernard Madoff’s investment vehicle.