The Privy Council has determined that, notwithstanding the absence of express statutory provisions permitting service out of the jurisdiction of fraudulent preference claims, such claims are to have extraterritorial effect. This decision clarifies the law as it relates to the extraterritorial effect of fraudulent preference claims; however, it also creates difficulties for subscribers to mutual funds that may be held liable for investments made on behalf of third-party beneficiaries that are the ultimate recipients of payments.
The Supreme Court of the Commonwealth of the Bahamas has acceded to the petition for Caledonian Bank Limited to be wound up as a foreign company pursuant to the Companies Winding-up Amendment Act, thereby exercising its jurisdiction for ancillary winding-up proceedings to be entered into. A petition was filed to wind up the insolvent company in the Bahamas so that the company's liquidators could access property in this jurisdiction.
The Liquidation Rules Committee has published the Foreign Proceedings (International Cooperation) (Relevant Foreign Countries) Liquidation Rules 2016. The most recent statutory enactment in relation to corporate insolvency in the Bahamas is the designation of a list of relevant foreign countries to which the Bahamian court will extend international cooperation in insolvency proceedings.
The Supreme Court of the Bahamas recently dismissed an application seeking various orders in aid of bankruptcy proceedings commenced in the United States concerning various Bahamian companies placed into Chapter 11. There is no equivalent to Chapter 11 under Bahamian law by which breathing space can be created or new capital can be injected on terms acceptable to any reasonable lender.
Legislative changes to the insolvency regime in the Bahamas provide for greater international cooperation and increased mechanisms for liquidators to pursue relief against debtors. The amendments provide a more comprehensive legal framework for improved administration of liquidations in order to seek the necessary relief in areas where the statute previously failed to provide any recourse.
In a recent landmark insolvency decision, the Supreme Court applied the modern approach to the determination of an application by joint liquidators for the production of documents and the oral examination of the named partners of former auditors of a company in voluntary liquidation. The court held that the liquidators had been unreasonable and that their application was oppressive.