Bermuda—setting aside transactions in the zone of insolvency
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—setting aside transactions in the zone of insolvency
  • What are reviewable transactions?
  • Fraudulent conveyances
  • Fraudulent preferences
  • Floating charges
  • Onerous transactions
  • Post-petition dispositions
  • Unlawful return of capital to shareholders except as authorised by statute
  • Bulk sales

Bermuda—setting aside transactions in the zone of insolvency

What are reviewable transactions?

Payments, transfers of assets, and security transactions can be vulnerable to attack in the event of the company’s insolvency or liquidation.

Reviewable transactions include:

  1. fraudulent conveyances

  2. fraudulent preferences

  3. floating charges

  4. onerous transactions

  5. post-petition dispositions

  6. unlawful return of capital to shareholders except as authorised by statute, and

  7. bulk sales of a business’s entire stock in trade

Fraudulent conveyances

Sections 36A to 36G of the Conveyancing Act 1983 provide that a creditor of a company may be entitled to apply to have a transaction set aside to the extent required to satisfy its claim, provided that the dominant intention of the transaction was to put the property beyond the reach of other creditors and the transaction was entered into for no value or significantly less than the value of the property transferred.

For these purposes, a creditor is one to whom an obligation is owed at the date of the transfer, or to whom it is reasonably foreseeable an obligation will be owed within two years of the date of the transfer, or to whom an obligation is owed pursuant to a cause of

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