An appeals court issued a ruling this month interpreting parts of the 2003 Insolvency Act, which may have broader implications for liquidating Virgin Islands companies.
Among other issues, the ruling of the Court of Appeal of the Eastern Caribbean Supreme Court clarifies the definition of a creditor under the Insolvency Act.
The court issued the April 1 ruling in the case of Westford Special Situations Fund Ltd. v. Barfield Nominees et al., overturning an earlier decision by Justice Edward Bannister to appoint a liquidator to wind up the investment fund.
Westford, a VI-registered fund, acted as a “feeder fund” that contributed investors’ money to a “master fund” in the Cayman Islands, which actually held the assets, according to the judgment. During the 2007 credit crisis, fund investors wanted their money back, but received only partial payment, the judgment said. Barfield, a group of investors seeking payment, petitioned the Commercial Court to have a liquidator appointed to wind up the fund and distribute the assets.
See the April 14, 2011 edition for full coverage.