Jamaica

The House of Representatives on Tuesday passed the new Insolvency Bill, repealing the current Bankruptcy Act and creating a legal environment for the use of insolvency laws, the Jamaica Observer reported. Jamaican law on bankruptcy and insolvency is currently contained in two pieces of legislation: the Bankruptcy Act, which covers personal and individual insolvency (inability to pay debt); and the Companies Act, which contains provisions to deal with the winding up of insolvent corporate bodies. The new act consolidates those provisions.

The proposed changes to Jamaica’s bankruptcy and insolvency law has been overhauled after several deficiencies were pointed out by stakeholders, The Gleaner reported. The bill, which seeks to repeal the existing bankruptcy law and to create new provisions to govern the regulation of bankruptcy and insolvency in Jamaica, has been criticised by stakeholders, and Justice Minister Mark Golding told the Senate last Friday that given the large number of amendments proposed in the 113-page report, it was decided to prepare a new bill.

Chief Executive Officer of the Jamaica Public Service Company (JPS) Kelly Tomblin says that the pressure from stolen electricity across the island is driving the power company into insolvency, the Jamaica Observer reported. Tomblin, speaking at a press conference at JPS’s New Kingston headquarters Thursday, said that in the two-year period 2012/2013 the power company lost US$73 million to stolen electricity. “The ship is going to sink under this weight. If this continues it might mean insolvency,” Tomblin declared at the company’s Knutsford Boulevard headquarters.

The Joint Select Committee (JSC) to review the Bankruptcy and Insolvency Bill is scheduled to have an all day meeting today at Gordon House, starting at 10:00 am, the Jamaica Observer reported. The committee was named last month after the Bill was tabled in the Senate by Minister of Justice, Senator Mark Golding. It is comprised of 14 members from both the House and the Senate, but is chaired by Minister of Industry, Investment and Commerce, Anthony Hylton.

Caribbean countries are lobbying furiously for an extensive international debt relief and investment programme, as politicians become increasingly anxious over the social impact of the region’s economic crisis and the resulting government austerity, the Financial Times reported. Most of the dozen anglophone countries in the tropical archipelago off the coast of the US are struggling with large government debts and lacklustre economies after the global financial crisis hurt tourism, the dominant industry of the Caribbean.

Actions towards parliamentary passage of an Insolvency Act are proceeding as planned as part of the growth-enhancing structural reforms being established to improve the business environment in Jamaica, according to the October 2013 report of the International Monetary Fund (IMF), The Gleaner reported. The Government has agreed that improvement to the insolvency framework is one of the pieces of legislation it expects to finalise before the end of the year.

Three bond restructurings totaling about $9.7 billion in the Caribbean this year are failing to ignite economic growth and may not help the region avoid more defaults, according to Moody’s Investors Service, Bloomberg reported. The bond swaps this year didn’t go far enough to fixing the Caribbean’s “unsustainable” mix of debt and deficits, Warren Smith, the president of the Caribbean Development Bank, said May 22.

Multilateral lenders have finalised a rescue package of almost $2bn for Jamaica, one of the most indebted countries in the world, as the Caribbean heavyweight attempts to return to fiscal and economic health, the Financial Times reported. The International Monetary Fund said on Monday that it would lend Jamaica $958m, some $200m more than expected, while the World Bank and the Inter-American Development Bank said they will each lend $510m.

Debt-shackled Jamaica's interest payments as a percentage of gross domestic product were the highest in the world last year even after a domestic debt restructuring two years ago, according to a Washington-based think tank, Bloomberg Businessweek reported. A new report on Jamaica's economy by the Center for Economic and Policy Research says the heavily-indebted Caribbean country's total interest payments were about $1.4 billion in 2011, or about 10 percent of GDP. That's about two-and-a-half times what was spent on capital programs.

The government is warning that it will not be reluctant to place the Jamaica Citrus Growers Limited into receivership if its board of directors fails to make certain critical decisions, by the end of this week, about the restructuring of the company, The Gleaner reported. The company is now facing bankruptcy following liquidity problems that commenced in 2006.