- within Accounting and Audit, Immigration and Insurance topic(s)
This article first appeared in Volume 22, Issue 1 of International Corporate Rescue and is reprinted with the permission of Chase Cambria Publishing - www.chasecambria.com
Synopsis
It has become a relatively frequent occurrence for Bermuda companies to enter into 'light touch' provisional liquidation in Bermuda for restructuring purposes. This is often in tandem with parallel insolvency proceedings
in the United States, Hong Kong or elsewhere, and where the Bermuda Supreme Court is acting as the ancillary court to a primary process taking place in the company's centre of main interests. Where there are
proceedings of this nature, the Court may require the implementation of a cross-border insolvency protocol and will often have to grapple with issues of recognition of a foreign order or plan. A recent ex tempore ruling of
Narinder Hargun CJ on 6 October 2023 in the matter of Re BlockFi International Ltd (in provisional liquidation for restructuring purposes) No.363 of 2022 has shed some light on the importance of such a protocol which was
drafted, somewhat atypically, not primarily to enhance inter-court cooperation and communication but to delineate and to an extent, regulate, the roles of estate fiduciaries and representatives appointed in Bermuda and in Chapter 11 proceedings in the United States.
Walkers' Bermuda office acted jointly on behalf of BlockFi International Ltd and its joint provisional liquidators, and were successful in seeking orders approving a comprehensive cross-border protocol and recognition
order with respect to the confirmed Chapter 11 plan. This article provides an overview of the proceedings, the common law basis for protocols and recognition, the challenges in designing a protocol to fit the circumstances,
and the key procedural aspects, including the court's jurisdiction to give directions to its officers, and to grant relief in support of an order for recognition of a foreign plan, including (in this specific case) a selfliquidating plan.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
