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Bermuda, a leading offshore commercial centre, does not currently have any modern, express statutory provisions relating to recognition and assistance to foreign officeholders. The legislative basis for insolvency proceedings is contained in the Companies Act 1981 (the ‘Act’) which was itself based on the English Companies Act 1948 and related regulations. Over the past 20 years, it has been required to adapt these provisions, and turn to common law principles, to meet the needs of international businesses looking to restructure.
Over the past 12 months there have been several decisions of the Bermuda Courts which have served to clarify and restate the law which has developed, in particular, as it relates to recognition and assistance. These cases have highlighted that the prior practices in these areas are now beyond doubt. This article explains by reference to these recent cases, the approach of the Bermuda Courts in respect of such matters.
While the cases referred to below have clarified the current common law position, given Bermuda’s business model the authors believe that it would be in the interests of the jurisdiction for there to be greater certainty through the adoption of these principles in legislation.1
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Bermuda: Recent Decisions on Recognition and Assistance and the Appointment of Provisional Liquidators
1 The Restructuring and Insolvency Specialists Association of Bermuda is currently reviewing the legislation with a view to proposing the adoption of provisions relating to restructuring, foreign assistance and winding up of foreign entities.
This article was first published in International Corporate Rescue, Volume 14, Issue 5.