Courts adopt new insolvency guidelines
Bermuda's courts have adopted new rules designed to help struggling international companies to stay afloat.
Chief Justice Ian Kawaley said he had issued a new Commercial Court practice direction based on Singapore rules aimed at improving communication and co-operation between courts in cross-border insolvency proceedings.
Dr Justice Kawaley said: “Trading companies of all descriptions often face cash-flow problems and are unable to pay their debts as they fall due.
“In such cases, ‘restructuring proceedings' are often commenced to reorganise the companies' debts so that they can continue to operate in a more profitable way rather than going out of business altogether.
“Most international business is carried out by companies forming part of a larger group whose corporate members are incorporated in and/or doing business in different parts of the world.
“When a group of companies are restructuring their affairs through court proceedings in different countries, it is important for a successful outcome for the various proceedings to be carefully coordinated.”
He added: “The practice direction gives effect, with minor modifications, to the Singapore-founded Judicial Insolvency Network guidelines. The JIN Guidelines are designed to increase the effectiveness of insolvent restructuring proceedings involving one or more companies where related proceedings are simultaneously taking place in multiple courts.”
The JIN Guidelines were adopted in Singapore last fall and JIN members include, in addition to Singapore and Bermuda, judges from Australia, BVI, Canada, Cayman, England & Wales, Hong Kong and the United States.
Bermuda's Commercial Court is believed to be the first offshore court to formally adopt the JIN guidelines.
There are currently more Bermuda-incorporated companies listed on the Singapore Stock Exchange than any other single foreign domicile.