After almost four years of existence, the Belgian “Act on Continuity of Enterprises” has achieved great success for companies in financial difficulties that wish to shelter from creditors’ lawsuits in order to attempt a restructuring of their business. The Act enables distressed companies to use effective and flexible recovery procedures to continue their business activities and to avoid insolvency.

Overeenkomstig artikel 53 Wet Continuïteit Ondernemingen (hierna “WCO”) is de deelname aan de stemming voorbehouden aan de schuldeisers in de opschorting op wiens rechten het reorganisatieplan een weerslag heeft. Het begrip “weerslag” moet ruim geïnterpreteerd worden en omvat alle maatregelen waarin een reorganisatieplan kan voorzien, zoals een opschortende termijn, een schuldvermindering of elke andere wijziging van de schuldvordering.

As part of what appears to be a global trend, the amount of litigation in Belgium is increasing rapidly. Litigation advice is fast becoming one of the most in-demand services in legal practice, along with advice on restructuring and employment. Due to the challenging economic and financial conditions, companies are now tending to commence debt collection proceedings as soon as their debtors fail to honour their debts, and are pre-emptively restructuring their businesses in order to avoid unnecessary costs which might eventually lead to bankruptcy.

It is usually held that Bermuda insolvency law follows English insolvency law, so far as possible, applying the same principles that would have applied immediately before the introduction of the English Insolvency Act in 1986.  That is a fair summary, but it does not tell the whole story. 

John Wasty, John Riihiluoma, Lalita Vaswani and Sam Riihiluoma, Appleby

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

The liquidators of two Cayman Island companies obtained orders under s 195(3) of the Bermudan Companies Act 1981 for PwC, as the companies' auditor, to provide information and documents to the liquidators. PwC decided to appeal but, in the meantime, did US$250,000 of preparatory work necessary to enable compliance, if required, with the orders.

As a result of the appeal, both orders were set aside. In PricewaterhouseCoopers v SAAD Investments Co Ltd & Anor (Bermuda) PwC applied to recover from the liquidators the costs of preparing to comply with the orders.

The Constitutional Court of FBiH has found that the current order of settlement of workers' claims in bankruptcy proceedings is unconstitutional.

With Judgment U-27/15, the Court declared articles 33 and 40 of the Law on Bankruptcy Proceedings (FBiH Official Gazette, nos. 29/03, 32/04 and 42/06) unconstitutional, which considerably affected the order of settlement of creditors in bankruptcy proceedings. 

The High Court considers questions relating to the location of three companies' COMIs and an alleged "improper motive" regarding the appointment of administrators

The new legislation on liquidation proceedings in Republika Srpska (Zakon o likvidacionom postupku “Official Gazette of Republika Srpska”, no. 82/19) (“New LPA“) comes into force on 12 October 2019. It introduces new, simplified, form of voluntary liquidation of companies and other business entities, and detailed rules on liquidation of assets and claims settlement in ordinary liquidation proceedings.

Simplified liquidation proceedings

PricewaterhouseCoopers (PwC) v Saad Investments Company Limited (SICL) and Singularis Holdings Ltd (SHL)involved an application by PwC for the setting aside of orders made by the Supreme Court of Bermuda in favour of the liquidators that required the production of documents relating to SICL and SHL.  Included among the grounds on which PwC relied to set aside the order were that: