Insolvency 2025

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

6. Cross-Border Issues in Insolvency 6.1 Sources of International Insolvency Law The principal source of international restructuring and insolvency law in Belize is Part XVIII (Cross-Border Insolvency) of the Act. This Part is modelled closely on the UNCITRAL Model Law on Cross-Border Insol - vency, providing a framework for co-operation, recog - nition and co-ordination between Belizean courts and foreign jurisdictions. The objectives include (Section 450): • co-operation between Belize’s High Court and foreign courts or insolvency administrators; • legal certainty for international trade and invest - ment; • fair and efficient administration of cross-border insolvencies; and • protection of creditors and facilitation of business rescue. Key statutory provisions and standards include: • Section 451, which defines key terms such as “for - eign main proceeding”, “foreign ancillary proceed - ing” and “foreign representative”; • Section 452, which affirms that Belize’s interna - tional treaty obligations prevail in case of conflict with domestic law; • Section 453, which establishes a public policy exception, allowing the High Court to refuse actions contrary to Belizean law or interests; • Sections 462–468, which govern recognition of foreign proceedings and the relief available upon recognition; and • Sections 472–474, which mandate direct co-oper - ation and communication between Belizean and foreign courts or representatives. Part XIX (Orders in Aid of Foreign Proceedings) of the Act supplements Part XVIII by allowing the High Court to grant assistance to foreign representatives where appropriate. 6.2 Jurisdiction The jurisdiction to commence a restructuring or insol - vency proceeding in Belize is based on the debtor’s

Liquidators or trustees may redeem secured property at the creditor’s stated value, subject to notice and judicial oversight (Sections 211 and 355). Secured creditors must account for any surplus upon realisa - tion (Sections 212 and 356). Unsecured creditors must lodge written claims for admission (Section 208). Once liquidation com - mences, they are stayed from initiating or continuing actions against the company or its assets (Section 174 (1)(c)), but may prove for debts in accordance with statutory priorities (Sections 206–209). They can - not enforce attachments or executions commenced pre-insolvency unless completed prior to liquidation (Section 175). Members’ rights are residual. Under Section 194, members’ liability is limited to unpaid share capital or contractual undertakings. They cannot claim divi - dends or other distributions until all creditors are satis - fied (Section 196). Past members within one year of liquidation may remain liable for unpaid contributions (Section 195). An automatic stay arises upon commencement of liquidation or bankruptcy, suspending enforcement actions and legal proceedings without court leave (Sections 174 (1)(c) and 328 (3)). However, secured creditors’ enforcement rights are exempt from the stay. Insolvency set-off applies automatically under Section 149, while ROT clauses remain valid subject to good faith and ordinary-course limitations (Section 84). Creditors cannot frustrate insolvency proceedings. However, they may challenge decisions or valuations through court application (Sections 210 (3)–(5) and 354 (3)–(5)). The Act does not expressly authorise third-party or non-debtor releases outside approved arrangements or compositions, preserving the general principle that only the debtor’s liabilities are discharged through insolvency.

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