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In The Matter Of Gerova Financial Group Limited 2011 Companies (Winding-Up) Commercial Court No. 369 [Original Location: Sc Vol. 76 P. 264], [2012] Sc (Bda) 18 Com (19 March 2012)

March 2012 LiquidationWinding UpInsolvency

BERMUDA

SUPREME COURT

COMPANIES – WINDING UP PETITION – STATUTORY DEMAND – DEBT COLLECTION

In this case the Court re-visited the well-travelled ground of the use of insolvency procedures as a method of debt-collection. The case involved, inter alia, the withdrawal of a winding up petition and consequential arguments on costs.

On the juxtaposition of insolvency law and commercial debt collection, the Court held: “…in my judgment there can be no impropriety in threatening or bringing winding-up proceedings where a company fails within a reasonable time to pay what reasonably appears to the unpaid creditor to be an undisputed debt”.

The Court cited the right of access to the Court under the Constitution and the costs of a writ action “against offshore companies in a highly internationalized commercial environment” and concluded: “it can hardly be abusive to threaten or commence winding-up proceedings in the hope that one’s debt will be paid more inexpensively and expeditiously than by other enforcement means”.

 

To continue reading full articles in PDF format:
In The Matter Of Gerova Financial Group Limited 2011 Companies (Winding-Up) Commercial Court No. 369 [Original Location: Sc Vol. 76 P. 264], [2012] Sc (Bda) 18 Com (19 March 2012)

 

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