Where an Originating Application for the appointment of
liquidators has been filed with the BVI Court, it is open to the
applicant, a creditor, the company or a member (with leave of the
Court) to make an application to Court for the appointment of
The Court has the discretion to appoint provisional liquidators
where the company consents to the appointment or the Court is
satisfied that the appointment is necessary for the purposes of
maintaining the value of the assets of the company, or is otherwise
in the public interest.
The powers of provisional liquidators are limited to the extent
necessary to maintain the value of the company's assets. The
appointment of provisional liquidators is however an important tool
to protect the position whilst an Originating Application is
pending, especially where those connected with the Company are
likely to dissipate assets. It is important to note that unlike
other jurisdictions, such as the Cayman Islands, provisional
liquidation does not act as a moratorium on claims being brought
against the company.
The BVI is a creditor friendly jurisdiction and accordingly the
BVI Court is willing to assist creditors by making provisional
liquidation appointments where a company's assets are under
threat. For example, Walkers obtained an order for the appointment
of provisional liquidators in circumstances where a ship belonging
to an insolvent shipping company was burning through US$10,000 of
fuel per day as well as other expenses. The appointment allowed the
provisional liquidators to have the ship arrested and the assets of
the company preserved for the benefit of the company's
Matthew Neal is an associate in the Insolvency and Dispute
Resolution Department of Walkers in the BVI.
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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In an era of increasing complexity in regulation globally, the BVI has carefully built a simple and clear regulatory framework that minimises the legal risk for lenders and financial markets participants dealing with BVI companies.
The economic downturn in recent years has resulted in the increase of natural persons declaring their businesses insolvent. Legislation that governs insolvency is based on Chapter 5 of the Insolvency Law...
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