Act was passed in the first quarter of 2016 but has not yet
become effective. It is a lengthy Act with a number of separate and
detailed statutory mechanisms which work in conjunction with one
another. The purpose of the Act is to address a situation where all
or part of a bank's business encounters financial difficulty or
is likely to encounter such difficulty. The Act seeks to provide a
mechanism for enabling the orderly transfer of the assets of a
distressed bank, and the protection of deposit holders'
interests in keeping with international standards.
The Act entails an initial rescue or stabilisation phase, an
insolvency phase and an administration phase. The Regulator is
granted wide powers to deal with claims, dispose of assets and
override strict legal priorities in order to maximize the
preservation of value and recovery of assets. The purpose of the
regime is to be able to stabilize a distressed bank by taking it
into public ownership, transfer ownership of assets to a bridge
bank, and/or ultimately transfer the bank or part of it to a new
bank and discharge the security over the assets of the distressed
banks in order to achieve the successful bail out.
In addition, directors of Banking institutions may be liable for
wrongful (i.e. negligent) trading in the zone of insolvency without
being guilty of fraudulent trading, and there are provisions
dealing with the reversal of extortionate credit transactions.
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.
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Confidentiality of corporate documents and information is one of
the key attractions of incorporating a company in the BVI. A
company search of the BVI Registrar of Corporate Affairs will only
disclose certain information and documents.
The primary sources of regulation of M&A in the British Virgin Islands are the Business Companies Act, 2004 (the "Companies Act") and common law.
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