BERMUDA Law and Practice Contributed by: Erik Gotfredsen, Jemima Fearnside and Larina Kenny, Wakefield Quin Limited
• on the date of the action to set aside the disposi- tion is owed an obligation arising from a cause of action which occurred prior to or within two years after the date of the transfer. Floating Charges Where a Bermuda company is being wound up, a floating charge on the undertaking or property of the Bermuda company that has been created within 12 months of the commencement of the winding-up will be invalid (unless it is proved that such compa- ny immediately after the creation of the charge was solvent). This is with the exception of any cash paid to such Bermuda company at the time of or subse- quently to the creation of, and in consideration for, the charge, together with interest on that amount. Therefore, a floating charge will be valid if the creditor provided new value at the time of, or in consideration for, the security. Otherwise, the floating charge is void to the extent that the creditor did not provide new value, unless the creditor proves that the company was not insolvent at the time of the charge’s creation. Disclaimer of Onerous Property From the commencement of a winding up of a Ber- muda company, the liquidator may, with leave of the Bermuda court, disclaim any property belonging to such company, whether real or personal, including any right of action or right under a contract (and therefore any corresponding obligation), which the liquidator believes to be onerous for such company to hold or is unprofitable or unsalable. We do not believe that a liquidator of a Bermuda company could disclaim some transactions under an agreement to which it is a party and not others.
uptick in the use of Bermuda vehicles in pan-jurisdic- tional financings, both public and private, and several Bermuda entities have reaped the benefits of lenders’ appetite for financings and refinancings in the green energy sector. 8.2 Public-Private Partnership Transactions With a land mass of only 20.6 square miles (53.2 square km) and a population of 65,000, public-private partnership transactions in the jurisdiction are limited. One of Bermuda’s first projects was the Acute Care Wing of the King Edward VII Memorial Hospital, which closed in 2010. In December 2020, the newly built L.F. Wade International Airport opened in Bermuda, hav- ing been a successful BMD400 million public-private partnership transaction. The Bermuda government continues to be committed to further public-private partnership transactions and in the coming years it is expected that additional transactions will be announced, including the wave power project being developed with Seabased (see 8.7 Natural Resourc- es ). 8.3 Governing Law Other than for local employment arrangements, which must be governed by and determined in accordance with Bermuda law, project documents can be gov- erned by foreign law and disputes determined accord- ingly. 8.4 Foreign Ownership Subject to certain exceptions, any non-Bermudian seeking to acquire real property in Bermuda must acquire a licence from, and/or obtain the permission of, the Bermuda government to be able to own and enforce rights pertaining to Bermuda real property. One such exception is the Economic Investment Residential Certificate programme, which enables individuals, plus their spouse and minor dependents, who invest BMD2.5 million in certain Bermuda indus- tries, sectors, charities, or government programmes
8. Project Finance 8.1 Recent Project Finance Activity
Bermuda’s geographical footprint limits domestic project finance activity; however, Bermuda vehicles (whether exempted companies, partnerships or lim- ited liability companies) are frequently used in project financing arrangements outside Bermuda for asset- based lending structures. The natural resources sec- tor, both in East Asia and in Norway, has seen an
to receive residency rights. 8.5 Structuring Deals
In general, other than for issues that have been dis- cussed herein, there are no Central Bank regulations applicable to Bermuda project financing transac-
46 CHAMBERS.COM
Powered by FlippingBook