Oct 2013
BERMUDA
SUPREME COURT
WINDING UP – APPOINTMENT OF JOINT PROVISIONAL LIQUIDATORS TO OVERSEE RESTRUCTURING PROCESS – LACK OF DISCLOSURE BY COMPANY – SECTION 164 OF THE COMPANIES ACT, 1981
The applications before the Court were for a winding up order, alternatively for the appointment of provisional liquidators to displace the management and, in the further alternative, for the appointment of joint provisional liquidators with ‘soft’ powers, all of which were opposed by the Company.
On hearing the Petition, it was clear that the restructuring process originally proposed for the Company had not progressed at the rate which had been hoped. In addition, for reasons that were ultimately not decisive, the composition of the informal committee, which the Company attempted to put together ended up being not representative of the general body of unsecured creditors. It was conceded that all committee members who had agreed to serve were in fact note-holders who were, to some extent at least, secured and therefore had interests which were different to those of the Petitioner and other unsecured creditors. The other matter of concern to the Court was that the Court was still very much in the dark, as was the Petitioner, about the broad financial picture.