Sep 2014
##BERMUDA
###SUPREME COURT
####SECTION 99 OF THE COMPANIES ACT, 1981 – NOTE CREDITORS – CONTINGENT CREDITORS – DEFINITION OF CREDITOR
Applications for directions in relation to convening meetings at which schemes of arrangements will be proposed to a company’s creditors or shareholders are typically an uneventful, _ex parte_, affair. At the hearing of the present application by the Company under Section 99 of the _Companies Act, 1981_ (the “Act”) for leave to convene meetings of creditors in Hong Kong to consider and potentially approve a scheme of arrangement, counsel for the Company and the Joint Personal Liquidators (“JPLs”) both addressed the Court, _inter alia_, on the apparently novel Bermudian law point of the ability of Note-Holders to vote as contingent creditors at their class meeting. It was common ground that this Court should follow persuasive judicial authority and practice from a variety of common law jurisdictions and permit voting on this basis. However, a problem arose because the Court had previously decided that Note-Holders who did not actually hold notes did not qualify as contingent creditors for the purposes of presenting a winding up petition: _Re Bio-Treat Technology Limited_ [2009] SC (Bda) 26 Civ (28 May 2009); [2009] Bda LR 29 (Bell J). Counsel was accordingly compelled to distinguish the present case from Re Bio-Treat Technology Ltd and/or to demonstrate why it ought not to be followed.