Liquidation of BVI funds and BVI corporate vehicles – important new guidance from the Court of Appeal

The Westford judgment has far reaching consequences for all those interested in the governance of BVI funds and corporate vehicles. The Court of Appeal has ruled that:

• members or former members with claims for dividends, profits, redemption proceeds or any other sums by reason of a BVI shareholding cannot appoint a liquidator over a BVI company.
• subject to the particular governing documents of a BVI fund or company, it may be possible to make an in specie redemption to investors.
• any outstanding redemption claims will be dealt with as part of the final adjustment between members from the residual assets of the estate once all creditors have been paid out.
• in the Westford case, where a liquidation order was set aside, the court had the power to order payment of the liquidators’ fees and expenses directly from the fund and also indirectly from investors.

Stephen Moverley Smith QC acted for the Fund, instructed by Harneys. If you would like further details of the case and/or his involvement, please contact our practice managers.