The British Virgin Islands Bankruptcy Act is mainly codified in the Insolvency Act 2003 and, to a lesser extent, in the Insolvency Rules 2005. Most of the priorities of bankruptcy law in the British Virgin Islands concern corporate bankruptcy rather than private bankruptcy. As an offshore financial centre, the British Virgin Islands has many more resident companies than citizens and, as a result, the courts spend more time on insolvency and corporate restructuring. After the insolvency law came into force in 2003 (and the repeal of earlier laws), the country had to wait almost 18 months for the Insolvency Code to enter into force in 2005. In practice, this meant that bankruptcies were not possible, as the transfer of certain important provisions, including details of preferred creditors, was deferred to the rules. What are the objections to senior management in the context of insolvency or restructuring? There is no special procedure for foreign creditors to follow when filing claims in insolvency proceedings in the British Virgin Islands. They are dealt with on the same basis as all national complaints. The Insolvency Act adopted the ISDA Model Clearing Legislation (form before 2007), so that any netting agreement relating to financial contracts takes precedence over the statutory provisions on insolvency compensation. [8] Financial contracts for these purposes are defined in detail in the Insolvency Rules. The court rejects the liquidation of a company on the grounds of insolvency if there is a good faith and material dispute over the solvency of the company. A source of controversy in the past has been whether the tribunal is empowered to resolve this issue if the parties have agreed that their dispute should be arbitrated. However, according to settled case-law, the courts of the British Virgin Islands have held that it is for the court to determine whether or not there is a dispute in good faith for essential reasons; Only if the court determines that it is a bona fide dispute will the dispute be resolved by arbitration: see Jinpeng Group v Peak Hotels & Resorts Limited BVIHCMAP2014/0025; China Alarm Holdings Ltd v China Alarm Holdings Acquisitions LLC BVIHCV2008/00385. Insolvency practitioners must be licensed in the British Virgin Islands to act as liquidator, administrator, administrative administrator of insolvency or regulator of an agreement with creditors.

A foreign insolvency administrator may act jointly with a licensed insolvency practitioner provided that (a) the Financial Services Commission has been informed in advance in writing of the proposed appointment and has not objected to it within the legal time limit. The insolvency regulations of the British Virgin Islands, for both individuals and businesses, are governed by the Insolvency Act 2003 (Act) and the Insolvency Rules 2005 (Rules). The provisions of the Act and Rules are largely based on the UK Insolvency Act 1986. In addition to not filing a complaint, are officers and directors personally liable for their company`s obligations? Are they responsible for measures prior to insolvency or corporate restructuring? Can they be sanctioned for other reasons? Overall, the two insolvency regimes can be said to be similar rather than different; They are largely faithful to their common law pedigree and maintain pari passu treatment of claims, subject to respect for the rights of secured creditors, preferred creditors and countervailing rights. Both courts largely avoid forms of recourse by debtors in self-administration and jealously protect the rights of secured creditors to assert their security before and after the commencement of liquidation. Are there any emerging trends or hot topics in insolvency and restructuring law? Is there any new or pending legislation that affects domestic bankruptcy proceedings, international cooperation in bankruptcy matters or the recognition of foreign judgments and orders? However, there are reasons other than insolvency for which the Court may make a winding-up order. In particular, the court may also order the winding-up of a company if it is «fair and equitable» or if (only at the request of the Attorney General or the British Virgin Islands Financial Services Commission (BVI FSC)) the liquidation of the company would be in the public interest. In the HQ Terms and Conditions document, an insolvency administrator licensed by the British Virgin Islands must be appointed to oversee the process as interim supervisor. The appointed interim supervisor then convenes a meeting of creditors at which the CA is reviewed.

All key conditions and powers of the supervisor are defined in the CA itself. In the British Virgin Islands, there are no formal procedures for expedited reorganizations or «out of the box» reorganizations. However, it is not uncommon for the management of a distressed company to work with the insolvency administrators and conduct a sale process before appointing a liquidator, and the liquidator then proceeds with that process – usually subject to court approval or sanction.