BELIZE Law and Practice Contributed by: Tim Prudhoe, Nadia Chiesa and Lemelko Missick, Stanbrook Prudhoe
therefore heavily restricted, requiring the supervision or approval of the administrator or the High Court. The company may seek new financing during admin - istration. The administrator has the power to borrow money, whether that borrowing is secured against the company’s assets or unsecured (Schedule I, para - graph 3). This means that new financing or borrowing is permissible, provided it is initiated through or with the authority of the administrator, who must act in the best interest of the creditors and under any necessary oversight from the High Court. Under the Act, the principal office holders in restruc - turing and insolvency proceedings are the supervisor, administrator, receiver, liquidator, bankruptcy trustee and official receiver, with each acting as an officer of the High Court with defined statutory powers and fidu - ciary duties. The supervisor must take possession of assets under the arrangement, keep accounting records and file periodic reports. The supervisor manages implemen - tation of the restructuring plan until its completion or termination (Sections 35–37). 4.5 The Position of Office Holders in Restructuring, Rehabilitation and Reorganisation The administrator must “take into his custody or under his control the assets” of the company and manage its affairs as “an officer of the High Court” (Section 86). Under Schedule I, the administrator may: • manage the business;
sion, protecting, and realising assets, and distributing proceeds to creditors (Sections 183–184). Schedule II authorises powers such as borrowing, selling property and compromising debts. The bankruptcy trustee’s duties are to take posses - sion of and realise the bankrupt’s estate and distrib - ute proceeds. With Court or creditors’ committee approval, trustees may exercise powers in Schedule IV, including carrying on business and mortgaging property (Sections 339–340). The official receiver is “an officer of the High Court” who may act as liquidator, trustee, receiver or supervi - sor and must follow the Court’s directions (Sections 503–504). 4.6 The Position of Shareholders and Creditors in Restructuring, Rehabilitation and Reorganisation Under the Act, creditors and members retain defined rights during restructuring, subject to a statutory mor - atorium and court supervision. Creditors are grouped by class – ie, secured, prefer - ential or unsecured (Section 293 (4)). Each class votes separately, and approval requires a two-thirds majority in value and High Court confirmation (Section 293 (3) (d)). Members have limited participation and vote only if directly affected. On commencement of the simplified debt restructur - ing programme, an automatic moratorium suspends enforcement, execution, repossession and lease ter - mination unless authorised by the High Court (Section 291 (1)(b)–(f)). Lawful set-off and netting arrangements remain valid under section 298 (2), but other enforcement rights are deferred during the stay. Creditors may object within 21 days (Section 287 (3)) or challenge court approval but cannot block proceedings once statutory thresholds are met. The Court may reclassify creditors to ensure fairness (Sec - tion 293 (5)).
• remove directors; • dispose of assets; • borrow funds; and • apply to the Court for directions.
The receiver acts as the company’s agent and must “exercise his powers in good faith and for a prop - er purpose” (Sections 125 (1) and 127 (1)). Powers include collecting income, managing and insuring assets, and realising secured property (Section 126). The liquidator is “an officer of the High Court and agent of the company” whose duties include taking posses -
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