Bermuda: Restructuring & Insolvency

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This country-specific Q&A provides an overview of the legal framework and key issues surrounding restructuring and insolvency in Bermuda.

This Q&A is part of the global guide to Restructuring & Insolvency.

For a full list of jurisdictional Q&As visit http://www.inhouselawyer.co.uk/index.php/practice-areas/restructuring-insolvency/

  1. What forms of security can be granted over immovable and movable property? What formalities are required and what is the impact if such formalities are not complied with?

    Mortgages and fixed charges are the most common form of security taken over immovable property. There are two forms of mortgage:

    • Legal mortgages: the mortgagor conveys legal title to the mortgagee as security for a debt and recovers legal title once the debt is repaid (Santley v Wilde [1899] 2 Ch 474).
    • Equitable mortgage: the mortgagor transfers the beneficial interest in its property to the mortgagee as security for the debt. The mortgagor retains legal title. An equitable mortgage will not take priority over a bona fide purchaser for value who acquires legal title without notice of the equitable mortgage.

    The most common forms of security taken over movable property are:

    • Mortgages, both legal and equitable: Legal mortgages are mostly used in relation to real property and chattels such as ships and aircraft.
    • Fixed charges: A charge over a specific moveable or immoveable asset.
    • Floating charges: A floating charge can be taken over a class of assets that change from day to day. The instrument creating a floating charge can provide that it crystallises, either on notice or upon some specified event (In re Brightlife [1978] 1 Ch 200), and converts into a fixed charge that attaches to the debtor's specific assets at that time.
    • Pledges: A right to take physical possession of the pledged asset and to sell it in the event of the debtor's default.
    • Liens: The right, pursuant to contract or statute, to retain possession of an asset until the debt is satisfied. The creditor is not automatically entitled to sell the asset if the debtor defaults.
    • Charge backs: A bank may take security over its client’s credit balances (section 2 Charge and Security (Special Provisions) Act 1990).
  2. What practical issues do secured creditors face in enforcing their security (e.g. timing issues, requirement for court involvement)?

    There are three methods by which a secured creditor may enforce its security:

    • A sale of the secured property through appointment of a receiver out of court pursuant to the terms of the security documents.
    • A sale of the secured property pursuant to statutory provisions, where available, governing a sale (for example, a statutory sale of mortgaged real property under the Conveyancing Act 1983).
    • Commencing debt recovery proceedings against the creditor, and on procuring a judgment, obtaining an order for the sale of the secured property. Such a process is only relevant where the security documents for the debt do not allow for a sale of the secured property or where the security is faulty.

    The effect of registration of security interests on priorities is an important practical issue. The date of registration of the security governs the order of priority for security interests capable of registration. Mortgages and charges over immovable property in Bermuda must be registered with the Registrar General. Fixed charges and floating charges over moveable property can be registered with the Registrar of Companies, as can a charge on assets outside of Bermuda. Specific statutory registration rules apply to mortgages over certain other moveable assets such as ships and aircraft.

  3. What is the test for insolvency? Is there any obligation on directors or officers of the debtor to open insolvency procedures upon the debtor becoming distressed or insolvent? Are there any consequences for failure to do so?

    A company will be insolvent if it is “unable to pay its debts” (section 161(e) Companies Act 1981). There are two tests for insolvency: the cash flow test and the balance sheet test (section 162(c) Companies Act 1981; In the matter of LAEP Investment Ltd [2014] Bda LR 35). In making a determination of insolvency, the concept of liabilities is extended and will include contingent liabilities.

    In the event that there may be some doubt as to whether or not a company is insolvent, or if proving insolvency may be difficult or costly, a creditor may issue a statutory demand for payment. If the demand has not been satisfied or set aside within 21 days, the company will be deemed to be insolvent.

    Directors are not required to file liquidation proceedings where a company becomes insolvent. However, if they do not, they risk personal liability for breach of fiduciary duties, fraudulent trading and/or misfeasance.

  4. What insolvency procedures are available in the jurisdiction? Does management continue to operate the business and / or is the debtor subject to supervision? What roles do the court and other stakeholders play? How long does the process usually take to complete?

    Where a company is insolvent, there are two forms of liquidation that will be relevant: compulsory liquidation and creditors’ voluntary liquidation. Both are creditor driven processes whereby the liquidator takes over the company’s management.

    A liquidator does not need to be a licensed insolvency practitioner nor resident in Bermuda. The liquidator may carry on the business of the company so far as is necessary for its beneficial winding-up, and during such period, will have the power and authority to supervise the conduct of the business on a day-to-day basis.

    Compulsory liquidation
    Compulsory liquidation is conducted under the supervision of the Court. It is initiated by a petition presented to the Court by one of:

    • a creditor, including contingent or prospective creditors;
    • the company itself (by a directors' resolution);
    • the power of the directors themselves to petition for the compulsory winding up of an insolvent company in certain circumstances has been recognised by the Court (In re First Virginia Reinsurance Ltd. [2003] Bda LR 47).
    • in certain circumstances, the Registrar of Companies (section 163 Companies Act 1981) or the Supervisor of Insurance (section 35 Insurance Act 1978).

    The liquidator of a company in Bermuda is described as a permanent liquidator (in contrast to a provisional liquidator). On appointment, an automatic stay comes into effect staying creditor actions, though secured creditors remain entitled to enforce their security (section 167(4) Companies Act 1981).

    Once the liquidator has realised all the company's assets and made distributions to creditors and shareholders, the liquidator must apply for a release from the Court and the company will be dissolved.

    Creditor’s voluntary liquidation
    A creditor’s voluntary liquidation is controlled by creditors of a company, although somewhat incongruously, it must be initiated by the company's shareholders through a resolution based on the recommendation of the board of directors (section 216 Companies Act 1981). Shareholders of the company approve the liquidation by a simple majority vote (unless the company's bye-laws specifically provide otherwise), after which a creditors' meeting must be held within 24 hours. At that meeting, a majority by value of the creditors present and voting appoint the liquidator and may also appoint a committee of inspection and fix the liquidator's remuneration.

    The automatic stay on proceedings being commenced or continued against the company does not apply in a voluntary liquidation. However, the Court can consider a liquidator's application to grant such a stay of creditor action.

    At the conclusion of the voluntary liquidation, the liquidator must convene final creditors' and shareholders' meetings. Within seven days of the meetings, the liquidator must notify the Registrar of Companies of the meetings and provide an account of the liquidation

    Role of stakeholders
    Those with an economic interest in the company will have influence during the process. For both compulsory liquidation and creditor’s voluntary liquidation, the unsecured creditors will therefore play the most significant role. In a voluntary liquidation, creditors can determine the course of the liquidation through their representatives on the committee of inspection.

    Length of process
    The length of time the process takes varies greatly depending on matters such as the size and complexity of the company and its debts.

  5. How do creditors and other stakeholders rank on an insolvency of a debtor? Do any stakeholders enjoy particular priority (e.g. employees, pension liabilities)? Could the claims of any class of creditor be subordinated (e.g. equitable subordination)?

    Debts which are secured by a mortgage or fixed charge will be satisfied from the proceeds of sale of the property secured (rule 73 Companies (Winding-Up) Rules 1982). The liquidator, however, will review the security and monitor the sale process since any excess amount a secured creditor recovers will be payable to the liquidation estate for distribution to stakeholders. If the proceeds from the sale of the property do not fully satisfy the debt secured, the creditor will be an unsecured creditor for the remainder of the debt.

    Creditors and shareholders are paid in the following priority:

    1. Costs of insolvency proceedings: costs and expenses incurred in the company's winding-up, including the liquidator's remuneration.
    2. Sums due to employees under their employment contracts.
    3. Preferred payments, including:
      a. unpaid taxes;
      b. contributions to occupational pension schemes; and
      c. liability for worker’s compensation.
    4. Debts secured by a floating charge.
    5. Unsecured debts.
    6. Debts due to shareholders in their capacity as shareholders.
    7. Any residual value or equity after all valid creditor claims have been satisfied in full will be returned to shareholders pari passu according to their shareholdings.

    Each category must be paid in full before payment of creditors in the subsequent category. Creditors in the same category rank equally among themselves but a company can enter into an agreement with its creditors, prior to the commencement of a liquidation, under which certain debts are contractually subordinated to other debts.

  6. Can a debtor’s pre-insolvency transactions be challenged? If so, by whom, when and on what grounds? What is the effect of a successful challenge and how are the rights of third parties impacted?

    There are three key types of pre-insolvency transaction that can be challenged:

    1. Voidable preferences: Any conveyance or other disposition of property made within six months before the commencement of the winding up is void if made with the intention to fraudulently prefer one or more of the company's creditors and the company was insolvent on the cashflow basis at the time (section 237(1) Companies Act 1981).
    2. Unlawful floating charges: A floating charge is voidable if created within 12 months of the commencement of insolvency proceedings for no consideration (section 239 Companies Act 1981).
    3. Fraudulent conveyances: An eligible creditor can apply to have a transaction or disposition of property set aside where the company’s dominant purpose was to put the property beyond the creditors' reach (sections 36A to 36G Conveyancing Act 1983).

    In addition, any disposition of the property of the company, including things in action, and any transfer of shares, or alteration in the status of the members of the company, made after the commencement of the winding-up, shall, unless the Court otherwise orders, be void (section 166 Companies Act 1981). The “commencement of the winding up” is the date of the resolution in the case of a voluntary liquidation and the presentation of the petition in a compulsory liquidation.

  7. What restructuring and rescue procedures are available in the jurisdiction, what are the entry requirements and how is a restructuring plan approved and implemented? Does management continue to operate the business and/or is the debtor subject to supervision? What roles do the court and other stakeholders play?

    There are two key restructuring procedures available in Bermuda: schemes of arrangement and the appointment of restructuring provisional liquidations to “hold the ring” while a scheme is being promoted.

    Schemes of Arrangement
    A scheme of arrangement, once sanctioned by the Court, creates a binding compromise between a company and its creditors and/or shareholders (section 99 Companies Act 1981). Schemes of arrangement are available to both solvent and insolvent Bermuda companies.

    The company itself or any member or creditor can initiate a scheme. Where a permanent liquidator has been appointed, the liquidator will propose the scheme rather than the company and may act in conjunction with the company’s directors.

    Proceedings are started by applying to the Court for directions as to the classes of creditors and/or shareholders proposed to be compromised by the scheme, and to convene meetings, on notice, of the various classes.

    Once approved by each class of creditors and/or shareholders, the Court will exercise its discretion to sanction the scheme if satisfied that:

    • The requisite statutory requirements have been met and the directions made at the convening hearing have been complied with;
    • Each class of creditors or shareholders has been fairly represented;
    • The arrangement is fair to creditors and/or shareholders generally; and
    • There is otherwise no blot on the scheme.

    The scheme must be approved by the various classes of creditors and/or shareholders affected by the scheme's proposals. A majority in number representing 75% in value of those present (either in person or by proxy) and voting at each class meeting must vote in favour of the scheme in order for the scheme to proceed to the sanction stage.

    There is no automatic stay preventing actions against the company during the period when the scheme is being proposed and implemented. However, it is possible to place a company into provisional liquidation, as elaborated below, to take advantage of the automatic stay whilst attempting to conclude a scheme.

    Once the Court has sanctioned the scheme and a copy of the sanction order is lodged with the Registrar of Companies, it is binding on the company and all affected creditors and shareholders, regardless of whether they voted.

    Restructuring provisional liquidation
    The Court has the power under sections 164(1) and 170 of the Companies Act 1981, when read together, to appoint provisional liquidators to aid in the restructuring of an insolvent company (Re Titan Petrochemicals Limited [2013] Bda LR 76). The primary purpose for appointing restructuring provisional liquidators is to trigger the statutory stay on proceedings being commenced or continued against the company (section 167(4) of the Companies Law 1981) thereby giving the company breathing space to attempt a restructuring without fear of winding up proceedings being brought against it by a disgruntled creditor.

    In order to appoint restructuring provisional liquidators, it is first necessary for a winding up petition to be presented so as to found the jurisdiction of the Court. Typically, the petition will be presented by the company although where a creditor’s petition has already been presented, the company may apply for the appointment of restructuring provisional liquidators in the course of the creditor’s proceeding. In the case of a company’s petition, the application will typically be made ex parte. Upon the appointment being made, the hearing of the winding-up petition will be adjourned.

    The view of the Supreme Court is that provisional liquidators play a central role in insolvent restructurings, a role which centrally shapes the character of the related court proceedings and the role played by the Court. As such, there is a strong starting assumption in favour of the appointment of restructuring provisional liquidators (In re Energy XXI Ltd [2016] SC (Bda) 79 Com (18 August 2016); In re Up Energy Developments Group Limited [2016] SC (Bda) 83 Com (20 September 2016)). As elaborated below, the same principle applies where the restructuring is to take place in a foreign jurisdiction.

    The Court has a broad discretion as to the scope of the powers it grants to restructuring provisional liquidators and which powers will remain with the company’s directors. Often, the provisional liquidators will be given ‘light touch’ powers where they simply act in aid of a restructuring being otherwise proposed by the company – effectively playing a monitoring and reporting role. However, that will not always be the case especially where it may be inappropriate for the company’s directors to promote the restructuring or if the directors consider it to be more prudent or practical for the promotion to be done by provisional liquidators (as was the case in In re Z-Obee Holdings Limited [2017] SC (Bda) 16 com (17 February 2017)). Ordinarily, the separation of powers between the provisional liquidators and the directors will be agreed prior to the making of the application and presented to the Court on a consensual basis.

    If a compromise is reached and a scheme is sanctioned by the Court, the provisional liquidation will be terminated and the company will continue as a going concern. If not, then the company will be wound up.

  8. Can a debtor in restructuring proceedings obtain new financing and are any special priorities afforded to such financing (if available)?

    In a liquidation, a permanent liquidator or provisional liquidator (unless his powers under the Companies Act 1981 have been restricted) can raise finance, including finance from existing creditors, to the extent necessary for the beneficial winding-up of the company. This is often advisable. Repayment of this finance depends on the negotiated terms which must be approved by the Court and which would usually take priority over existing creditors as a debt in the winding up.

  9. How are existing contracts treated in restructuring and insolvency processes? Are the parties obliged to continue to perform their obligations? Will termination, retention of title and set-off provisions in these contracts remain enforceable? Is there any an ability for either party to disclaim the contract?

    Existing contracts
    Subject the disclaimer of onerous contracts discussed below and the transaction avoidance provisions under the Companies Act 1981 discussed above, existing contracts are generally unaffected by insolvency processes. The terms of the contract in question however may of course provide for what is to happen in case of insolvency.

    Retention of title
    Under a retention of title clause, a creditor retains legal title to goods supplied to the debtor until they have been paid for provided that the goods remain capable of being identified and have not been transformed into other property or sold to a third party.

    Set off
    In a liquidation, there is a mandatory set-off where there have been mutual credits, mutual debts or other mutual dealings between the company and a creditor (section 37 Bankruptcy Act 1989 and section 235 Companies Act 1981). The set-off extends to non-contractual claims as well as debts. In the case of mutual dealings, an account is taken of what is due from one party to the other.

    Disclaimer of property
    The liquidator of a company can, with the Court’s permission, disclaim any property belonging to the company, or any rights under any contracts, which he considers to be onerous, unprofitable or unsaleable (section 240 Companies Act 1981). The Court may, on an application by a person interested in disclaimed property, make an order for the vesting of the property in, or the delivery of the property to, any persons to whom it may seem just. Any person who suffers loss by the operation of a disclaimer is a creditor of the company entitled to prove for his loss in the winding-up.

  10. What conditions apply to the sale of assets/the entire business in a restructuring or insolvency process? Does the purchaser acquire the assets “free and clear” of claims and liabilities? Can security be released without creditor consent? Is credit bidding permitted?

    A permanent liquidator has broad statutory powers, though usually exercisable only with the sanction of either the Court or of the committee of inspection (section 175 Companies Act 1981). This includes the power to sell the assets of a company in liquidation and the power to release security that the company holds over assets. The release of security however cannot be effected without the consent of the secured creditor unless the security is voided pursuant to the avoidance provisions in the Companies Act 1981 discussed above.

    The liquidator sells company assets on behalf of the company, and as such, can pass no better title than that which the company has. The title acquired by purchasers is unaffected by the liquidation. Thus, a purchaser of an asset which has an encumbered title will take title to the property subject to the encumbrance.

    There is no code to dictate the fairness of the procedure for credit bidding. Instead, one has to make application to Court and argue first principles, or look to other jurisdictions’ prescriptions on such matters.

  11. What duties and liabilities should directors and officers be mindful of when managing a distressed debtor? What are the consequences of breach of duty?

    The fiduciary duties owed by directors of a Bermuda company are prescribed by statute (section 97 Companies Law 1981) and by the common law. In essence, such duties reflect the contemporary English position and require directors to act honestly and in good faith with a view to the best interests of the company, and to exercise the care, diligence and skill of a reasonably prudent person. When a company is in the “zone of insolvency”, the interests of the company will be reflected by creditor interests.

    Directors can be liable for the debts of an insolvent company if, during the course of the winding-up of a company, the company has carried on its business with the intention of defrauding its creditors (section 241 Companies Act 1981). The Court has the power to summon persons suspected of involvement in the fraud for examination under oath or through written interrogatories. Importantly in the context of a director’s obligations, the Companies Act 1981 does not recognise the concept of “wrongful trading” (i.e. directors potentially being liable for a company’s debts if they permit the company to trade while insolvent).

    Companies may, and generally do, indemnify their directors against liability for negligence, default, breach of duty or breach of trust (section 98 Companies Act 1981) but any indemnity which extends to liability for fraud or dishonesty will be void. A director shall be deemed not to be acting honestly and in good faith if he fails to disclose at the first opportunity his interest (whether direct or indirect) in any material contract or proposed material contract with the company or any of its subsidiaries.

    Shadow directors, and probably de facto directors, are in the same position as de jure directors for these purposes, all being officers of the company.

    There is a paucity of case law on claims for breach of directors’ duties in Bermuda since, even where there is no indemnity given by the company, culpable directors are invariably sued in the jurisdiction where they reside so as to aid in the enforcement of any judgment.

    Claims for breach of fiduciary duty or in negligence can be brought by an insolvent company against directors, and in this respect, there are statutory provisions dealing with the duties owed by directors (see section 97 Companies Act 1981). Monies recovered would increase the assets available for distribution to creditors.

  12. Is there any scope for other parties (e.g. director, partner, parent entity, lender) to incur liability for the debts of an insolvent debtor?

    Partners
    Each partner is jointly liable with the other partners for all debts and obligations of the firm incurred while he is a partner. Execution will not issue against partnership property except on a judgment against the partnership firm.

    Parent entities
    Absent any contractual obligation such as a guarantee or a parent company being complicit in the wrongdoings of a subsidiary, a parent company will not be held liable for an insolvent subsidiary company's debts except for situations where creditors can pierce the corporate veil.

    Other parties
    A third party can be held liable for the debts of an insolvent company if that person has taken part in the management of the company in circumstances that amount to fraudulent trading, even if that person is not a director. A person who has knowingly assisted a director to commit a breach of his fiduciary duties or other wrongdoing to the company can be held liable for the loss to the company subject to any lawful indemnity afforded to the director.

  13. Do restructuring or insolvency proceedings have the effect of releasing directors and other stakeholders from liability for previous actions and decisions?

    It is not unusual for the terms of a restructuring proposal to contain provision for directors to be released from liability for previous actions and decisions. However, the inclusion of such a release is often a vexed and hotly debated issue for creditors. Absent express exclusion in the terms of the scheme, directors will remain liable for their prior acts.

  14. Will a local court recognise concurrent foreign restructuring or insolvency proceedings over a local debtor? What is the process and test for achieving such recognition?

    The Supreme Court is congnisant that Bermuda companies often form part of a larger corporate structure which conducts business and holds assets in various parts of the world. In an insolvency or restructuring context therefore, it is important for there to be cooperation between the different jurisdictions in which proceedings will be necessary.

    There is no statutory provision regarding the treatment of cross-border concurrent insolvency proceedings in other jurisdictions. The Bermuda courts, however, have co-operated with foreign proceedings, allowing the foreign court to take the lead role where it can be shown that to do so would be in the best interests of the company, especially where the foreign court has the closest connection to the company or is the most appropriate jurisdiction to make an order (Re Contel Corporation Limited [2011] Bda LR 13).

    Similarly, there is no statutory provision requiring the Bermuda courts to recognise foreign restructuring or insolvency proceedings. However, the Bermuda court has held on numerous occasions that it has discretion to do so and will often recognise and assist foreign proceedings in circumstances where:

    • The company has a sufficient connection with the foreign jurisdiction (such as property, assets, liabilities, or management in the foreign country) so as to make it the most convenient jurisdiction to hear the application;
    • The company similarly has a sufficient connection with Bermuda to justify the Court’s involvement (for example, the foreign company has conducted business in Bermuda or has assets which will necessitate litigation in Bermuda);
    • The assistance sought by the foreign liquidators would be available in the jurisdiction of the main insolvency proceedings; and
    • Local Bermuda law or public policy does not prevent it.

    During the course of 2016 and 2017, the Bermuda Court has made a number of orders:

    • Assisting a foreign court in a restructuring by appointing ‘light touch’ provisional liquidations and thereby triggering the statutory stay to give the company breathing space to promote a scheme or compromise in the foreign jurisdiction; and
    • Recognising a foreign restructuring by ordering a permanent stay of proceedings being brought in Bermuda against the company by the compromised creditors.

    Most of the cases before the Court in recent times have related to the restructuring of US oil and gas ventures under Chapter 11 of the US Bankruptcy Code which have included Energy XXI Ltd, C & J Energy Services Ltd, Up Energy Ltd, and Titan Petrochemicals Ltd.

    To further the cooperation mandate of the Supreme Court and increase the effectiveness of cross-border insolvencies and restructurings, the Court has adopted the new “Guidelines on Communication and Cooperation between Courts in Cross-border Insolvency Cases” promulgated by the Judicial Insolvency Network whose members include judges from Australia, the BVI, Canada, the Cayman Islands, England & Wales, Hong Kong SAR, Singapore and the United States. The guidelines address key aspects of communication and cooperation between courts, and as at March 2017, they have been adopted by Singapore, the United States, Delaware, and Bermuda.

    The Bermuda Court has consistently demonstrated a highly flexible approach to the recognition of foreign proceedings and will continue to do so. However, given the lack of express statutory provision dealing with assistance and recognition, it is an open question whether this approach will withstand scrutiny of the appellate courts.

  15. Can debtors incorporated elsewhere enter into restructuring or insolvency proceedings in the jurisdiction?

    No. It was held by the Privy Council in PricewaterhouseCoopers v Saad investments Company Limited [2014] UKPC 35 that the Bermuda Court’s jurisdiction to wind up companies is wholly statutory in nature and the provisions of the Companies Act 1981 do not extend to a foreign company unless it has been granted a permit by the Minister of Finance to carry on business in Bermuda.

  16. How are groups of companies treated on the restructuring or insolvency of one of more members of that group? Is there scope for cooperation between office holders?

    Where related companies enter into insolvency or restructuring, the corporate veil remains in place.

    Liquidators’ duties will be owed only to the creditors of the company to which they were appointed. In practice, where a number of entities in a corporate group enter liquidation, it would be usual for the same persons to be appointed liquidators over each of the insolvent entities, and the Court will generally favour that approach where faced with competing candidates for appointment. In relation to cooperation generally, see the discussion under the preceding heading.

  17. Is it a debtor or creditor friendly jurisdiction?

    The statutory scheme of Bermuda casts it as a creditor friendly jurisdiction with the emphasis being on creditor recoveries. There are no regimes in place akin to a UK administration or a Chapter 11 proceeding under the US Bankruptcy Code. In recent years however, there has been a strong judicial move in Bermuda, through case law, to embrace a culture of corporate rescue notwithstanding that the Companies Act 1981 does not expressly support such an approach. This has in turn has moved Bermuda away from its previous status as being creditor friendly. To date, it is only decisions at first instance which have promoted this approach and it remains to be seen whether the Courts of Appeal take a similar interpretation of the relevant statutory provisions.

  18. Do sociopolitical factors give additional influence to certain stakeholders in restructurings or insolvencies in the jurisdiction (e.g. pressure around employees or pensions)? What role does the state play in relation to a distressed business (e.g. availability of state support)?

    Socio-political factors do not play a significant role in commercial restructurings in Bermuda. Typically, one is dealing with entities that are part of a wider business operating in a transnational sector such as insurance, finance, transport or international trade. Issues such as employees and pensions are therefore unlikely to be substantial. Bermuda is committed to its role as a hub for offshore commerce and any action to prejudice that position is unlikely.

  19. What are the greatest barriers to efficient and effective restructurings and insolvencies in the jurisdiction? Are there any proposals for reform to counter any such barriers?

    Bermuda is a creditor friendly jurisdiction and restructurings and insolvencies can generally be conducted efficiently and effectively.

    The process of restructuring provisional liquidation will benefit from greater certainty as more cases are decided and the parameters of the procedure become more defined.

    As Bermuda companies so often form part of larger corporate structures, one of the primary barriers to efficient restructurings is coordinating a restructuring/insolvency with processes in other jurisdictions. As noted above, the Courts have demonstrated a willingness to be flexible when dealing with cross-border restructurings and insolvencies, in particular in relation to recognizing and assisting foreign processes, but case law in this area is still developing.

    There are currently no proposals for reform.