British Virgin Islands Corporate Restructuring and Turnaround Competency Guide: Cross-Border Assistance – Commentary

To what extent do courts assist overseas appointees (through recognition) and under what circumstances?
Are there generally imposed limitations on the recognition of a foreign appointee?
What types of overseas appointees have been recognized in the British Virgin Islands?
Do courts help subject BVI incorporated companies to insolvency proceedings in other jurisdictions?

This cross-border assistance Q&A is one of a series on business restructuring and turnaround jurisdiction in the British Virgin Islands.(1)

To what extent do courts assist overseas appointees (through recognition) and under what circumstances?

Statutory recognition
The British Virgin Islands can provide assistance to persons appointed abroad by the relevant designated foreign jurisdictions, namely Australia, Canada, Finland, Hong Kong, Japan, Jersey, New Zealand, United Kingdom United and the United States.(2) The courts of the BVI will take into account:

  • fair treatment of all claimants in foreign proceedings;
  • the protection of persons in the British Virgin Islands who may have claims in foreign proceedings;
  • prevention of preferences and fraud;
  • the need to rank foreign claimants in order with BVI claimants; and
  • courtesy.

The field of authorized commands is very wide:

  • restrict procedures;
  • handing over the company’s assets to a foreign representative;
  • coordination of BVI insolvency with foreign insolvency; Where
  • authorization of the foreign representative of any person likely to be questioned in the context of BVI insolvency proceedings.

Common law recognition
The current position of the BVI is that common law assistance can be given to foreign appointees, but only to those in relevant jurisdictions for the purposes of legal recognition.

Are there any limitations generally imposed on the recognition of a foreign appointee?

Two limitations should be noted:

  • The courts of the BVI may not grant any assistance which infringes the rights of set-off or the rights of privileged or secured creditors without their consent.
  • Under common law assistance, relief will only be granted if it is available to the foreign appointee in their home jurisdiction and available at common law in the British Virgin Islands.

What types of overseas appointees have been recognized in the British Virgin Islands?

A Hong Kong bankruptcy trustee has been recognized. A US receiver was denied recognition on the grounds that the receivership was intended to protect US investors and was not for the purpose of “reorganization, liquidation or bankruptcy” as required by Section 273 of the Insolvency Law of 2003.

Do courts help subject BVI incorporated companies to insolvency proceedings in other jurisdictions?

No. Although part XVIII of the law contains provisions based on the UNCITRAL Model Law on Cross-Border Insolvency, this part has not entered into force.

The existence of foreign insolvency proceedings in respect of a BVI company does not prevent BVI courts from appointing a BVI liquidator and, under common law, the BVI proceedings will be considered as the main proceedings.

For more information on this topic, please contact Brian Lacy, Nicolas brookes, Anthony Oakes or Ray Wearmouth in Ogier by phone (+44 1481 721 672) or email ([email protected], [email protected] Where [email protected]). The Ogier website is accessible at the address www.ogier.com.

End Notes

(1) For the first article in the series, please see “Guide to Competence in Corporate Restructuring and Turnaround for the British Virgin Islands: National Procedures “.

(2) This list of relevant jurisdictions is currently being revised for expansion.

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