Insolvency 2025

BELIZE Law and Practice Contributed by: Tim Prudhoe, Nadia Chiesa and Lemelko Missick, Stanbrook Prudhoe

5.2 Course of the Liquidation Procedure The commencement of restructuring or insolvency proceedings under the Act occurs when a formal application or resolution is accepted or a Court order is made. This constitutes the triggering event that activates statutory moratoria, transfers management powers, and subjects the debtor to court or official supervision. Once a restructuring or insolvency procedure begins, control of the debtor’s assets and operations gener - ally transfers to an appointed administrator (corporate entities) or trustee (individuals). Directors remain in office but may only act with the administrator’s writ - ten consent (Section 86 (4)–(5)). A statutory morato - rium applies, preventing enforcement, repossession or execution without High Court approval. Administrators act as officers of the High Court and assume control of the company’s business, assets and affairs to preserve value and achieve the objec - tives of administration (Section 86 (2)–(3)). They may remove or appoint directors, dispose of assets and manage operations (Section 89, Schedule I). Trustees in bankruptcy act similarly for individuals, collecting and realising the estate and distributing proceeds to creditors (Section 340–341). A creditors’ committee, where established, consults with and monitors the office holder but cannot issue binding directions (Sections 438–443). Office holders must act impartially, prioritising credi - tors’ collective interests. Pre-insolvency contracts remain enforceable unless disclaimed or modified by court order. Administrators may apply to dispose of assets subject to security or retention-of-title agreements with notice to affected parties (Section 91). Financial contracts and netting agreements remain enforceable, unaffected by mora - toria (Sections 301–303). While arbitration clauses in commercial contracts remain valid, core insolvency proceedings must be conducted before the High Court, which retains supervisory jurisdiction. Arbitration may only address

Members rank last and may retain equity only if all creditor claims are satisfied or if the restructuring plan expressly allows it (Section 293 (2)). 5. Statutory Insolvency and Liquidation Procedures 5.1 The Different Types of Liquidation Procedure The Act provides three main procedures: • simplified debt restructuring; • administration; and • bankruptcy. All of these procedures are applicable to both corpo - rate and individual debtors, depending on eligibility. Simplified debt restructuring (Sections 283–288) is designed for small companies with turnover and lia - bilities under BZD1 million (Schedule VI). A simplified debt restructuring, discussed at 1.2 Types of Insol- vency and 3.1 Out-of-Court Restructuring Process , is initiated by company resolution submitted to the official receiver. The eligibility requirement is set out in section 286 and Schedule VII of the Act, if the company is already in liquidation or receivership it will be ineligible. The process involves the official receiver, with a restructuring advisor, reviewing eligibility. Creditors may object within 21 days (Section 287 (3)). Administration (Sections 75–77) is available to compa - nies that are or are likely to become insolvent, where there is a reasonable prospect of rescue. Administra - tion is initiated by the company, its board, a creditor, a supervisor of an arrangement or the FSC. The effect of administration is that the High Court appoints an administrator to manage affairs and protect assets. Bankruptcy (Sections 306–312) applies to individuals unable to pay their debts. It is initiated by the debtor or any creditor. The criteria are that the High Court must find the debtor insolvent on a balance sheet or cash-flow basis.

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