BVI Court Confirms It Has Power To Order Block Transfer Of An Insolvency Practitioner's Appointments

Published date22 July 2022
Subject MatterInsolvency/Bankruptcy/Re-structuring, Insolvency/Bankruptcy
Law FirmCollas Crill
AuthorDavid Harby and Nia Statham

David Harby and Nia Statham were successful in obtaining what is believed to be the first published judgment permitting the block transfer of insolvency and receivership appointments in the BVI.

The case, outlined below, provides a useful precedent for insolvency practitioners and firms in the jurisdiction seeking to transfer multiple appointments in a cost-effective and efficient way.

In what is the first known published judgment on the point, the BVI Commercial Court recently held that it has the power to order the block transfer of an insolvency practitioner's appointments.

A block transfer refers to the transfer of the appointments of an insolvency practitioner over a number of companies, in one single application. This is in contrast to the creditors of each separate company in liquidation having to approve the change to the insolvency practitioner's appointment, or the need for a separate Court application approving the change of the appointment for each company.

In In the Matter of the Application of Wesley Arthur Edwards, a Licensed Insolvency Practitioner1 David Harby and Nia Statham of Collas Crill L.P. acted for the Applicant, who sought a block transfer in respect of a large number of companies of which he had been the liquidator or Court-appointed receiver. The Applicant had left his employment at Begbies Traynor (BVI) Ltd. ("Begbies") and was seeking those appointments to be transferred to another insolvency practitioner at Begbies.

The case raised two issues. The first was whether the Court had the power to approve a block transfer. The second was whether a licence was required from the Governor of the BVI in order to permit the transfer of receiverships over assets that were frozen under the Russian sanctions regime.

On the first issue, the BVI Court noted that the BVI Insolvency Act, 2003 contains no express power for it to make a block transfer order, which is unlike the current position in England.

However, the BVI Court considered an English Court of Appeal decision2 which predated the legislative change in England that allowed block transfers to be made. In that decision, the English Court of Appeal looked at previous cases which suggested that bankruptcy was a court-controlled process, in relation to which the Court had wide powers that were not limited to those expressly conferred by the relevant legislation.

The English Court of Appeal also suggested that similar...

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