Insolvency Rules (Revised 2020)

Summary

This is a lengthy statutory instrument (183 pages) made under the BVI Insolvency Act, setting out the detailed court procedure and forms that govern all insolvency proceedings in the Virgin Islands. It covers how applications, hearings, notices, meetings and appointments are conducted for companies and individuals going through creditors arrangements, administration, receivership, liquidation, bankruptcy and disqualification proceedings.

• Court procedure: Governs filing and service of insolvency applications, hearings, affidavits, and how the Eastern Caribbean Supreme Court Civil Procedure Rules apply to insolvency matters.
• Meetings and voting: Sets rules for calling and conducting creditors' and members' meetings, proxies, company representation, and creditors' committees.
• Creditors' arrangements: Prescribes the proposal, interim supervisor appointment, reporting and Court application procedures for both company and individual creditors' arrangements.
• Administration and receivership: Details how administration orders are obtained, administrators appointed, replaced or discharged, and how receivers give notice and advertise their appointment.
• Liquidation: Covers appointment and removal of liquidators, provisional liquidators, settling the list of members, claims (using prescribed Form R184), distributions and disclaimer of onerous property.
• Bankruptcy: Sets out creditor and debtor applications for bankruptcy orders, the bankruptcy trustee's appointment and duties, claims (Form R279), discharge and annulment procedures.
• Prescribed financial services licence: Defines a prescribed financial services licence, for the purposes of the 'regulated person' definition in the Act, as a licence, authorisation, permission or recognition under the Banks and Trust Companies Act, Insurance Act, Company Management Act, or Securities and Investment Business Act.
• Other matters: Also addresses netting and financial contracts, insolvency practitioner remuneration and consent to act, and administration of the Insolvency Surplus Account.

The Rules apply generally to companies, individuals, insolvency practitioners (liquidators, administrators, receivers, bankruptcy trustees, supervisors) and licensed financial services entities involved in or affected by insolvency proceedings before the BVI courts. Three schedules set out CPR provisions disapplied in insolvency proceedings, the list of preferential claims, and the prescribed forms used throughout the process.

Key obligations

• Office holders (liquidators, administrators, receivers, bankruptcy trustees) must advertise their appointment and give notice to the Registrar, Commission and Official Receiver as prescribed by the Rules.
• Companies and individuals subject to insolvency proceedings must submit a verified statement of affairs (or statement of assets and liabilities) when required by notice, unless released or granted an extension by the Court.
• Creditors must submit claims using the prescribed claim forms (Form R184 for company liquidations, Form R279 for bankruptcies) to be admitted to vote or receive a dividend.
• Insolvency practitioners appointed as office holders must provide their consent to act.
• Persons calling creditors' or members' meetings must give notice in the form and manner, and to the persons, prescribed by the Rules.
• Office holders must cooperate with and report to creditors' committees and keep the Court informed regarding disclaimer of onerous property.

Applies to

companies in insolvency proceedings, individuals (bankrupts), insolvency practitioners, liquidators, provisional liquidators, administrators, administrative receivers, bankruptcy trustees, supervisors of creditors' arrangements, creditors, licensees under the Banks and Trust Companies Act, licensees under the Insurance Act, licensees under the Company Management Act, licensees under the Securities and Investment Business Act

Deadlines

• 16 August 2004: Commencement date for rules 3 and 324 of the Insolvency Rules.
• 30 June 2005: Commencement date for the remaining provisions of the Insolvency Rules, except for Part V (Administration).