What are the principal forms of security in the British Virgin Islands in respect of movable and immovable property?
What is the effect on secured creditors of the commencement of an insolvency procedure?
Which creditors are preferred and to what extent?
What is the position regarding the recoverability and quantum of liquidator's fees and expenses of the insolvency procedure?
This Q&A on creditors is part of a series on restructuring and corporate recovery jurisdiction in the British Virgin Islands.(1)
What are the principal forms of security in the British Virgin Islands in respect of movable and immovable property?
The forms of security vary according to whether they relate to movable or immovable property.
Movable property
Shares in a BVI company are the most commonly secured BVI asset. Typically, an equitable charge will be taken over the shares with the title to the shares remaining with the chargor subject to a commercially agreed enforcement scenario.
Immovable property
Land and other immovable property situated in the British Virgin Islands is not an asset class that is typically the subject of security.
What is the effect on secured creditors of the commencement of an insolvency procedure?
There is no effect without their agreement in writing.
Which creditors are preferred and to what extent?
The preferred creditors are:
- employees with a credit of up to $10,000; and
- the BVI government in varying amounts.
What is the position regarding the recoverability and quantum of liquidator's fees and expenses of the insolvency procedure?
Typically, a liquidator's fees are charged at market hourly rates. They are rarely fixed as a percentage. Fees and expenses are payable out of the estate, subject to court assessment.
For further information on this topic please contact Brian Lacy, Nicholas Brookes, Anthony Oakes or Ray Wearmouth at Ogier by telephone (+44 1481 721 672) or email ([email protected], [email protected] or [email protected]). The Ogier website can be accessed at www.ogier.com.
Endnotes
(1) For the first article in the series, please see "Restructuring and corporate recovery jurisdiction guide for British Virgin Islands: domestic procedures". For the second article, please see "Restructuring and corporate recovery jurisdiction guide for British Virgin Islands: cross-border assistance".