Sophia Rolle-Kapousouzoglou
Updates
Insolvency & Restructuring
Privy Council determines extraterritorial reach of clawback claims in insolvency proceedings
Bahamas | 23 August 2019The Privy Council has determined that, notwithstanding the absence of express statutory provisions permitting service out of the jurisdiction of fraudulent preference claims, such claims are to have extraterritorial effect. This decision clarifies the law as it relates to the extraterritorial effect of fraudulent preference claims; however, it also creates difficulties for subscribers to mutual funds that may be held liable for investments made on behalf of third-party beneficiaries that are the ultimate recipients of payments.
Supreme Court exercises statutory jurisdiction to wind up foreign company
Bahamas | 24 June 2016The Supreme Court of the Commonwealth of the Bahamas has acceded to the petition for Caledonian Bank Limited to be wound up as a foreign company pursuant to the Companies Winding-up Amendment Act, thereby exercising its jurisdiction for ancillary winding-up proceedings to be entered into. A petition was filed to wind up the insolvent company in the Bahamas so that the company's liquidators could access property in this jurisdiction.
Bahamas designates list of relevant foreign countries
Bahamas | 20 May 2016The Liquidation Rules Committee has published the Foreign Proceedings (International Cooperation) (Relevant Foreign Countries) Liquidation Rules 2016. The most recent statutory enactment in relation to corporate insolvency in the Bahamas is the designation of a list of relevant foreign countries to which the Bahamian court will extend international cooperation in insolvency proceedings.
Supreme Court declines recognition of Chapter 11 proceedings
Bahamas | 25 September 2015The Supreme Court of the Bahamas recently dismissed an application seeking various orders in aid of bankruptcy proceedings commenced in the United States concerning various Bahamian companies placed into Chapter 11. There is no equivalent to Chapter 11 under Bahamian law by which breathing space can be created or new capital can be injected on terms acceptable to any reasonable lender.
Insolvency and restructuring – challenges facing companies and individuals
Bahamas | 20 March 2015Legislative changes to the insolvency regime in the Bahamas provide for greater international cooperation and increased mechanisms for liquidators to pursue relief against debtors. The amendments provide a more comprehensive legal framework for improved administration of liquidations in order to seek the necessary relief in areas where the statute previously failed to provide any recourse.
Litigation
Supreme Court evaluates scope of trustees' protection in contentious trust litigation
Bahamas | 07 August 2018The Supreme Court recently assessed the protection afforded to trustees by virtue of Section 83 of the Trustee Act 1998, which provides that a trustee cannot be bound or compelled by way of discovery to disclose information and documents about a trust. In Dawson-Damer, a trustee had used Section 83(8) as a basis to refuse a disclosure request. The applicant's case was built primarily on the allegation of a breach of duty (ie, the trustee had failed to consider the applicant's needs).
Court of Appeal confirms 'no leave to appeal' ruling
Bahamas | 02 August 2011Crawford International recently appealed a judgment relating to the determination of a preliminary issue concerning the scope of a management contract. A preliminary objection was taken to the appeal on the basis that the judgment was interlocutory and no leave to appeal had been obtained. However, the appeal court determined that the judgment on the preliminary issue was final rather than interlocutory, and as such no leave was required.
Private Client & Offshore Services
Privy Council determines extraterritorial reach of clawback claims in insolvency proceedings
Bahamas | 22 August 2019The Privy Council has determined that, notwithstanding the absence of express statutory provisions permitting service out of the jurisdiction of fraudulent preference claims, such claims are to have extraterritorial effect. This decision clarifies the law as it relates to the extraterritorial effect of fraudulent preference claims; however, it also creates difficulties for subscribers to mutual funds that may be held liable for investments made on behalf of third-party beneficiaries that are the ultimate recipients of payments.
Bahamian insolvency regime continues to promote judicial efficiency
Bahamas | 28 February 2019The Bahamian legislature continues to examine its existing legislation for ways to promote judicial efficiency by amending and implementing new procedures in its insolvency regime. As the global economy continues to grow and foreign companies and investors increasingly face obstacles arising from the use of offshore structures, the need for cross-border insolvency proceedings and the use of protection afforded to investors will likely continue to increase.
Supreme Court evaluates scope of trustees' protection in contentious trust litigation
Bahamas | 09 August 2018The Supreme Court recently assessed the protection afforded to trustees by virtue of Section 83 of the Trustee Act 1998, which provides that a trustee cannot be bound or compelled by way of discovery to disclose information and documents about a trust. In Dawson-Damer, a trustee had used Section 83(8) as a basis to refuse a disclosure request. The applicant's case was built primarily on the allegation of a breach of duty (ie, the trustee had failed to consider the applicant's needs).
Payment of preferential debts out of assets subject to floating charge not permitted
Bahamas | 26 October 2017The Supreme Court recently considered whether preferential creditors have any claim against the moneys received by receiver-managers for the sale of assets subject to a charge. The court determined that a floating charge which crystallised before the making of a winding-up order takes priority over other creditors.
Remittal of assets in cross-border insolvency proceedings
Bahamas | 20 April 2017The Bahamas Supreme Court recently considered the relationship between the statutory provisions in recognition proceedings which permit the turnover of property to a debtor (a foreign corporation or other foreign legal entity subject to a foreign proceeding in the country in which it is incorporated or established) and the common law power to direct remittal of assets to the foreign main proceedings where an ancillary liquidation is underway.
Receiver-managers obtain court's blessing: self-dealing and fair-dealing rules not violated
Bahamas | 15 December 2016The joint receiver-managers of the assets of Baha Mar applied to the Supreme Court for a direction that the intended sale of Baha Mar's secured assets to a special purpose vehicle (SPV) would not amount to self-dealing or infringe the fair-dealing rule. The court was satisfied that the sale to the SPV was pursued by the joint receiver-managers in good faith and achieved after adequate precautions were taken to achieve the best price reasonably obtainable at the time.
Legal proceedings stayed in favour of mediation in accordance with Arbitration Act
Bahamas | 15 September 2016The Supreme Court recently determined that legal proceedings should be stayed based on the construction of the dispute clause in an arbitration agreement. The court held that there is persuasive authority even where an arbitration clause is discretionary, and that a party retains the option of invoking this authority. It was therefore reasonable for the court to conclude that referral to mediation was contemplated before arbitration proceedings could be pursued.
Supreme Court exercises statutory jurisdiction to wind up foreign company
Bahamas | 23 June 2016The Supreme Court of the Commonwealth of the Bahamas has acceded to the petition for Caledonian Bank Limited to be wound up as a foreign company pursuant to the Companies Winding-up Amendment Act, thereby exercising its jurisdiction for ancillary winding-up proceedings to be entered into. A petition was filed to wind up the insolvent company in the Bahamas so that the company's liquidators could access property in this jurisdiction.
Bahamas designates list of relevant foreign countries
Bahamas | 19 May 2016The Liquidation Rules Committee has published the Foreign Proceedings (International Cooperation) (Relevant Foreign Countries) Liquidation Rules 2016. The most recent statutory enactment in relation to corporate insolvency in the Bahamas is the designation of a list of relevant foreign countries to which the Bahamian court will extend international cooperation in insolvency proceedings.
Cayman Bank liquidators denied common law and statutory recognition in the Bahamas
Bahamas | 31 March 2016In a "jurisprudentially unattractive" decision, the Supreme Court of the Commonwealth of the Bahamas has refused the liquidators of Caledonian Bank recognition in the Bahamas, where assets in the region of $16 million are held. By refusing recognition to the liquidators, the court has declined to grant assistance to liquidators which are meant to protect the interests of creditors, not the debtors' estate.
Billionaire adjudicated bankrupt under 1869 statute
Bahamas | 21 January 2016The Bahamian Supreme Court recently declined to register a composition with creditors sought by Irish billionaire Sir Anthony O'Reilly. The court took the alternative route of adjudicating him bankrupt instead. The decision was based on legal difficulties with the proposed composition under Section 97 of the Bankruptcy Act of 1869.
Supreme Court declines recognition of Chapter 11 proceedings
Bahamas | 01 October 2015The Supreme Court of the Bahamas recently dismissed an application seeking various orders in aid of bankruptcy proceedings commenced in the United States concerning various Bahamian companies placed into Chapter 11. There is no equivalent to Chapter 11 under Bahamian law by which breathing space can be created or new capital can be injected on terms acceptable to any reasonable lender.
Insolvency and restructuring – challenges facing companies and individuals
Bahamas | 19 March 2015Legislative changes to the insolvency regime in the Bahamas provide for greater international cooperation and increased mechanisms for liquidators to pursue relief against debtors. The amendments provide a more comprehensive legal framework for improved administration of liquidations in order to seek the necessary relief in areas where the statute previously failed to provide any recourse.
Court sets aside order granting leave to serve summons outside jurisdiction
Bahamas | 12 December 2013The Supreme Court of the Commonwealth of the Bahamas has set aside an order granting a liquidator leave to serve a summons outside the jurisdiction on a company incorporated in Bermuda, which sought the recovery of a payment as a fraudulent preference. The liquidator sought a declaration that a payment made to the foreign company before the liquidation amounted to a fraudulent preference payment.
Supreme Court clarifies International Business Companies Act
Bahamas | 19 April 2012In a recent decision the Supreme Court clarified amendments made by the International Business Companies (Amendment) Act 2010. The court held that there is no statutory bar preventing the applicant applying for the restoration of an international business company, even if the company was struck off before the commencement of the International Business Companies Act of 2000.
Court of Appeal confirms 'no leave to appeal' ruling
Bahamas | 04 August 2011Crawford International recently appealed a judgment relating to the determination of a preliminary issue concerning the scope of a management contract. A preliminary objection was taken to the appeal on the basis that the judgment was interlocutory and no leave to appeal had been obtained. However, the appeal court determined that the judgment on the preliminary issue was final rather than interlocutory, and as such no leave was required.
