Enforcement Rising As Lenders Begin To Lose Patience

A noticeable trend has developed whereby creditors, particularly financial institutions, appear to be moving more quickly to formally enforce their rights by way of winding up petitions. This is particularly the case as regards debtor companies operating in Asia. Lenders appear less willing to wait to see whether the market improves or the fortunes of a borrower change. We are seeing far more instructions to move expeditiously to seek liquidation orders. This is not a trend that we believe will ease in 2022. A corollary to this seems to be how the Bermuda Court's approach the application and use of Bermuda's light touch provisional liquidation regime to support restructuring. The court of course remains willing to make an initial order appointing provisional liquidators for restructuring purposes. That said, creditor dissent seems to have caused the court to expect more advanced and developed restructuring plans earlier in the process and scrutinizing those proposals quite carefully.

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.