Mobile Menu
Offshore Cases

In the Matter of Opus Offshore Limited [2017] SC (Bda) 14 Com (17 February 2017)

February 2017 Companies Winding Up Liquidation

BERMUDA

SUPREME COURT

APPLICATIONS FOR WINDING UP ORDER ON CREDITORS' PETITIONS - WHICH OF TWO COMPETING PETITIONS SHOULD HAVE PRIORITY - WHETHER, IN ABSENCE OF COMPANY, PERSON APPEARING ON WINDING UP PETITION HAS STANDING TO DISPUTE PETITION DEBT - WHETHER PETITION DEBT DISPUTED IN GOOD FAITH AND ON SUBSTANTIAL GROUNDS - WHO SHOULD BE APPOINTED PROVISIONAL LIQUIDATORS WHERE THERE ARE COMPETING NOMINATIONS

In Opus Offshore Limited, the Court was faced with two separate winding up petitions presented by different creditors, each petitioner seeking different provisional liquidators on their petition. The petitioner, in respect of the second petition, filed the petition in its capacity as a creditor, but it was also the majority shareholder of the company.

In respect of the competing petitions, the Court saw no reason to depart from the general rule, as adopted by the English courts, that priority should be given to the petition presented first. However, this did not impact the determination of who should be appointed as provisional liquidators. In this regard, having established that none of the proposed nominees were conflicted and all were eminently qualified the Judge took into account that: (i) the opposition of the shareholders to a winding up petition or, by parity of reasoning, to the choice of provisional liquidator, will carry less weight than the wishes of the creditors (particularly, in this instance, given the shareholders’ involvement with the management of the debtor company) and (ii) disputed debts of supporting creditors will carry less weight than they would if their claims had not been disputed by the Company. With this in mind, and noting that the choice of provisional liquidators is a matter for the Court’s discretion, the Judge proceeded with the first petitioner’s nomination reasoning that such appointees were most likely to command the confidence of a majority of those who will seek to prove in the liquidation in light of the fact that a large number of creditors had supported such appointments.

 

To continue reading full articles in PDF format:
In the Matter of Opus Offshore Limited [2017] SC (Bda) 14 Com (17 February 2017)

 

Accolades
_

"Few firms can come close to Conyers on one critical metric, and this is the breadth of the client base."
- IFLR1000

EDITOR & HEAD OF LITIGATION BERMUDA

Christian R. Luthi
Tel: +1 441 298 7814
Email: christian.luthi@conyersdill.com


Head of Litigation British virgin islands

Mark J. Forte
Tel: +1 284 852 1113
Email: mark.forte@conyersdill.com


Head of Litigation Cayman Islands

Paul Smith
Tel: +1 345 814 7777
Email: paul.smith@conyersdill.com


HEAD OF THE ASIA DISPUTES & RESTRUCTURING GROUP

Nigel K. Meeson, QC
Tel: +852 2842 9553
Email: nigel.meeson@conyersdill.com

Offshore Cases

In the Matter of Opus Offshore Limited [2017] SC (Bda) 14 Com (17 February 2017)

17 February 2017

BERMUDA

SUPREME COURT

APPLICATIONS FOR WINDING UP ORDER ON CREDITORS' PETITIONS - WHICH OF TWO COMPETING PETITIONS SHOULD HAVE PRIORITY - WHETHER, IN ABSENCE OF COMPANY, PERSON APPEARING ON WINDING UP PETITION HAS STANDING TO DISPUTE PETITION DEBT - WHETHER PETITION DEBT DISPUTED IN GOOD FAITH AND ON SUBSTANTIAL GROUNDS - WHO SHOULD BE APPOINTED PROVISIONAL LIQUIDATORS WHERE THERE ARE COMPETING NOMINATIONS

In Opus Offshore Limited, the Court was faced with two separate winding up petitions presented by different creditors, each petitioner seeking different provisional liquidators on their petition. The petitioner, in respect of the second petition, filed the petition in its capacity as a creditor, but it was also the majority shareholder of the company.

In respect of the competing petitions, the Court saw no reason to depart from the general rule, as adopted by the English courts, that priority should be given to the petition presented first. However, this did not impact the determination of who should be appointed as provisional liquidators. In this regard, having established that none of the proposed nominees were conflicted and all were eminently qualified the Judge took into account that: (i) the opposition of the shareholders to a winding up petition or, by parity of reasoning, to the choice of provisional liquidator, will carry less weight than the wishes of the creditors (particularly, in this instance, given the shareholders’ involvement with the management of the debtor company) and (ii) disputed debts of supporting creditors will carry less weight than they would if their claims had not been disputed by the Company. With this in mind, and noting that the choice of provisional liquidators is a matter for the Court’s discretion, the Judge proceeded with the first petitioner’s nomination reasoning that such appointees were most likely to command the confidence of a majority of those who will seek to prove in the liquidation in light of the fact that a large number of creditors had supported such appointments.

 

To continue reading full articles in PDF format:
In the Matter of Opus Offshore Limited [2017] SC (Bda) 14 Com (17 February 2017)

 

 

EDITOR & HEAD OF LITIGATION BERMUDA

Christian R. Luthi
Tel.: +1 441 298 7814
Email.: christian.luthi@conyersdill.com


Head of Litigation British virgin islands

Mark J. Forte
Tel.: +1 284 852 1113
Email.: mark.forte@conyersdill.com


Head of Litigation Cayman Islands

Paul Smith
Tel.: +1 345 814 7777
Email.: paul.smith@conyersdill.com


HEAD OF THE ASIA DISPUTES & RESTRUCTURING GROUP

Nigel K. Meeson, Q.C.
Tel.: +852 2842 9553
Email.: nigel.meeson@conyersdill.com