News
The British Virgin Islands in the five years since the inception of the Insolvency Regime has experienced a tremendous growth in the Recovery and Insolvency Industry. There now exist an established group of licensed Insolvency Practitioners (IP) carrying out work under the Insolvency Act (Act). The Financial Services Commission (FSC), the regulatory body under the Act, has conducted a round of onsite inspections on licensee’s practices to ensure that legislation, prudential standards and best practices are followed. A regime to investigate and conduct Director’s Disqualification and establishes a Register of Disqualified Directors is being formulated.
The British Virgin Islands was chosen as the venue for the launch of a new Commercial Court. This Court is an extension of the Eastern Caribbean Supreme Court (ECSC) which hears commercial matters from Caribbean territories such as Anguilla, Antigua and Barbuda, Grenada, Dominica, Montserrat, St Kitts and Nevis, St Lucia, St Vincent and the Grenadines.
The Commercial Court opened on 30 October, 2009 with Judge Edward Bannister QC presiding over all matters. As the BVI has over 400,000 active companies, this court has become a key litigation centre for offshore lawyers.
The BVI as a member of the ECSC has the Privy Council as its Court of Final Appeal.
- Insolvency Act, 2003
- Insolvency (Amendment and Consequential Provisions) Act, 2004
- Insolvency (Transitional Provisions) Regulations, 2004
- Insolvency Practitioners Regulations, 2004
- Insolvency Code of Practice
- Insolvency Rules 2005
- BVI Business Companies Act, 2004
- Companies Act
- International Business Companies Act
- Anti-Money Laundering Regulations, 2008
- Anti-Money Laundering and Terrorist Financing Code of Practice, 2008
Personal
Insolvency procedures
The following insolvency procedures are available to individuals:
- Individual creditors’ arrangement
- Bankruptcy
Corporate
Insolvency procedures
The following insolvency procedures are available to companies:
- Solvent winding-up and striking off
- Company creditors’ arrangement
- Administration ( commencement date not yet announced)
- Receivership
- Administrative receivership
- Provisional Liquidation
- Liquidation (liquidator appointed by the Court or by members)
Role
played by Government
No direct role is played by Government. The British Virgin Islands Financial Services Commission (the “FSC”), a statutory corporation and an autonomous regulatory agency of the Government, has responsibility for;
- The licensing and regulation of insolvency practitioners
- The appointment of an Official Receiver
The Official Receiver acts as an insolvency office holder when appointed by the Court and has other functions generally intended to assist with the smooth operation of the insolvency sector. It is also the Official Receiver’s responsibility to make the applications to Court for director’s disqualification orders and bankruptcy restriction orders.
Role
played by private sector practitioners
Private sector practitioners perform all personal and corporate insolvency procedures (except those cases where the Official Receiver is appointed by the Court). Insolvent office holders (other than the liquidators of solvent liquidations, initiated pursuant to the Companies legislation, and receivers in receiverships that are not administrative receiverships) must hold an insolvency practitioner’s licence issued by the Commission.
Provisions exist to enable BVI licensed insolvency practitioners to take appointments jointly with overseas practitioners.
On 11 December, 2009 the Restructuring and Insolvency Specialist Association (BVI) limited (RISA) was formed. This body consists of approximately 45 industry professionals in the insolvency field. The organisation is a member association of the International Association of Restructuring, Insolvency & Bankruptcy Professionals (INSOL International). The organization seeks to promote the insolvency profession and continuous development of its members by offering continuous professional development programs.
Role
played by the Court
The High Court determines petitions for the appointment of administrators, provisional liquidators, liquidators and bankruptcy trustees. The Court also rules on insolvency matters brought to it by insolvency office holders, creditors and others.
Does
the insolvency system in the British
Virgin Isands allow for:
1. |
Different
procedures for the insolvency of individuals
and the insolvency of companies? |
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|
2. |
Creditors
to accept an arrangement outside of formal
bankruptcy/liquidation proceedings? |
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|
3. |
Priority
payment for employee creditors? |
|
|
4. |
Priority
payment for taxation debts? |
|
|
5. |
Automatic
disqualification of directors of failed companies
from managing other companies? |
|
|
6. |
Recognition
of insolvency proceedings being conducted
in another jurisdiction? |
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7. |
A
government agency to undertake insolvency
administration work? |
|
|
8. |
Some
form of licensing of private sector practitioners? |
|
|
9. |
A
review of the remuneration claimed by an
insolvency practitioner by either a court
or other government regulator? |
|
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10. |
A
mandatory scale of fees applicable to insolvency
practitioner remuneration? |
|
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11. |
Surveillance
of the work of private sector practitioners
by a government regulator? |
|
|
12. |
Collation
of insolvency statistics by a government
regulator? |
|
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