BERMUDA Trends and Developments Contributed by: John Wasty, Claire van Overdijk, Sam Riihiluoma, James Batten and Jordan Knight, Appleby
Bermuda continues to reinforce its position as a lead- ing international financial and (re) insurance centre, attracting multinational organisations from across the world. Its sophisticated legal framework and robust regulatory environment make it a preferred choice for cross-border transactions, restructurings and dispute resolution. This article outlines recent trends and developments across the areas of Restructuring and Insolvency, Commercial, Trusts and Regulatory law, demonstrat- ing Bermuda’s reputation as a stable and competitive jurisdiction capable of addressing complex litigation. Section A: Restructuring and Insolvency Despite its small jurisdiction, Bermuda continues to prove itself as a reliable destination for restructuring, maintaining a sophisticated and diligent approach to corporate structure and regulation. Recent years have seen growing restructuring activity, as well as a number of key developments in case law and market trends worth noting. Legal framework Bermuda’s insolvency law framework consists of stat- ute and common law. The principal statutory provi- sions governing corporate insolvency and restructur- ing are contained in Part XIII of the Companies Act 1981 (Companies Act) and are supported by the Com- panies (Winding-Up) Rules 1982 (Winding-Up Rules). The Companies Act is based on the English Compa- nies Act 1948 and the Companies Winding-Up Rules are based on the English Companies (Winding-Up) Rules 1949. No substantive changes have been made to Part XIII of the Companies Act and the Winding-Up Rules since they were enacted, although there have been minor amendments introduced pursuant to the Companies (Winding-Up) Amendment Rules 2020. These provi- sions include: • allowing creditors to access court files; • imposing a requirement that at least one Joint Pro- visional Liquidator (JPL) be Bermuda-resident; and • the introduction of other modernisation steps.
A key element of the Bermuda insolvency landscape is the willingness of the Bermuda court to work in tandem with, and to assist, foreign courts and Ber- muda companies with interests in other jurisdictions where there is a substantial international creditor or asset base. Market trends Rising restructuring and insolvency activity There is a noticeable rise in formal enforcement and insolvency actions in Bermuda, with between 15 and 30 winding-up petitions per year, of which around a third convert into an order for the winding up of the company or the appointment of JPLs. A recent trend is a recognition by stakeholders that a scheme of arrangement is not the only means by which restructuring transactions can be effected in Bermuda. Provisional liquidators may use their pow- ers, or powers exercisable with the sanction of the court, to enter into a transaction without a scheme. This may be a more appropriate course of action when, for instance, all counterparties to a transaction and all stakeholders with an economic interest in the company consent to it. Under these circumstances, there is no need for a scheme to bind dissenting mem- bers of any class. Take, for example, the high-profile case of Chishti v Afiniti Ltd [2025] SC (Bda) 33 Civ. In this case, the evidence demonstrated that Afiniti Ltd would collapse if a restructuring were not achieved before the com- pany’s cash resources ran out. Rather than a propos- ing a scheme of arrangement, the JPLs successfully obtained orders from the Bermuda Supreme Court under sections 175 (1) (e) and 175 (2) (a) of the Com- panies Act to exercise their powers of compromise, or as applicable, sale to implement a restructuring trans- action whereby effectively the whole of the assets and undertaking of the company were to be transferred and/or sold to a new company ultimately owned and
controlled by the secured lenders. Evolving regulatory enforcement
The Court has considered and determined an increas- ing number of petitions presented by regulators, which enhances Bermuda’s reputation as a well-regulated financial jurisdiction.
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