Bermuda and international insolvencies
Produced in partnership with Alex Potts QC of Conyers

The following Restructuring & Insolvency practice note produced in partnership with Alex Potts QC of Conyers provides comprehensive and up to date legal information covering:

  • Bermuda and international insolvencies
  • Introduction
  • Parallel insolvency proceedings relating to Bermudian companies in both Bermuda and a foreign jurisdiction
  • Parallel schemes of arrangement
  • Recognition of foreign schemes of arrangement
  • Parallel insolvency proceedings relating to foreign companies in both Bermuda and a foreign jurisdiction
  • Recognition of foreign insolvency proceedings in Bermuda
  • International insolvencies—recognition of Bermudian insolvency proceedings in foreign jurisdictions
  • Anticipated reforms

Bermuda and international insolvencies

Introduction

Bermuda has no statutory equivalent of Chapter 15 of the US’s Bankruptcy Code, section 426 of the UK’s Insolvency Act 1986 (IA 1986), or the UK’s Cross-Border Insolvency Regulations 2006, SI 2006/1030, by which the UK implemented the United Nations Commission on International Trade Law’s (UNCITRAL) Model Law on Cross-Border Insolvency.

However, Bermuda’s judiciary has in a number of cases exercised its powers at common law, under its inherent jurisdiction, and under the Companies Act 1981 (CA 1981) to achieve similar results to those that might be available under those pieces of legislation.

The scope of such powers has been considered (and to some extent limited) by the Privy Council, in the context of two related appeals from the Court of Appeal Bermuda, being Singularis Holdings v PricewaterhouseCoopers (Bermuda) and PricewaterhouseCoopers v Saad Investments Company (Bermuda). See Re Celestial Nutrifoods Limited [2017] Bda LR 11 (not reported by LexisNexis®) and Re C&J Energy Services Ltd [2017] Bda LR 22 (not reported by LexisNexis®).

For the purposes of IA 1986, s 426, Bermuda is a relevant territory, under the Co-operation of Insolvency Courts (Designation of Relevant Countries and Territories) Order 1986, SI 1986/2123.

Parallel insolvency proceedings relating to Bermudian companies in both Bermuda and a foreign jurisdiction

Many of Bermuda’s international business companies are exempt companies that conduct business activities in foreign jurisdictions, and many are listed on foreign

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