Feb 2017
BERMUDA
SUPREME COURT
PARALLEL RESTRUCTURING PROCEEDINGS FOR BERMUDA AFFILIATED COMPANIES – BERMUDA PROVISIONAL LIQUIDATION AND CHAPTER 11 PROCEEDINGS IN US – US COMI-APPLICATION BY JOINT PROVISIONAL LIQUIDATORS FOR RECOGNITION ORDER IN RELATION TO US PLAN CONFIRMATION ORDER-APPLICATION FOR WINDING-UP ORDER AND ACCELERATED LIQUIDATION PROCESS-JURISDICTION TO DISPENSE WITH STATUTORY MEETINGS – COMPANIES ACT, 1981 AND COMPANIES (WINDING UP) RULES, 1981
In C&J Energy Services Ltd, the Court, referring to Energy XXI (In the Matter of Energy XXI Ltd [2016] SC (Bda) 79 Com), granted recognition of a Chapter 11 plan and granted a permanent injunction in aid of such a plan. The Court also set out its jurisdiction to authorise an accelerated winding-up procedure in circumstances where the plan, confirmed by the US Bankruptcy Court provided that the Bermuda company was to be wound up and certain requirements under the Companies Act, 1981 (the “Act”) (namely Sections 171, 168, 181 and 185) be dispensed with.
The Court held that it is empowered under the Act (as read with the Companies (Winding-Up) Rules, 1982) to short circuit the formal winding-up process where engaging the usual machinery serves no useful commercial or public purpose. In C&J all known debt and equity interests had apparently been extinguished in the foreign ‘main’ proceeding which the Bermuda proceedings were commenced to support and assist. The Company’s affairs had been fully wound-up by the time the winding-up order was sought so it was considered to be an obvious case for the court exercising its powers to expedite the winding-up process.