Mar 2012
##BERMUDA
###SUPREME COURT
####COMPANIES – WINDING UP PETITION – STATUTORY DEMAND – DEBT COLLECTION
In this case the Court re-visited the well-travelled ground of the use of insolvency procedures as a method of debt-collection. The case involved, _inter alia_, the withdrawal of a winding up petition and consequential arguments on costs.
On the juxtaposition of insolvency law and commercial debt collection, the Court held: “_…in my judgment there can be no impropriety in threatening or bringing winding-up proceedings where a company fails within a reasonable time to pay what reasonably appears to the unpaid creditor to be an undisputed debt_”.
The Court cited the right of access to the Court under the Constitution and the costs of a writ action “_against offshore companies in a highly internationalized commercial environment_” and concluded: “_it can hardly be abusive to threaten or commence winding-up proceedings in the hope that one’s debt will be paid more inexpensively and expeditiously than by other enforcement means_”.