Yesterday, the ECSC Court of Appeal set aside the winding up order made in the case of Westford Special Situations Fund Ltd. v. Barfield Nominees Limited and another, and dismissed the Joint Liquidators appointed over the fund.
Westford was put into liquidation earlier this year by shareholders whose application was based on their entitlement to unpaid redemption proceeds. At first instance the application was allowed and Joint Liquidators were appointed over the Fund on two grounds:-
- As members with claims based on redemption proceeds they were classed as creditors and had the requisite standing to bring an application to wind up a company. In effect, their application was not barred by section 197 of the BVI Insolvency Act; and,
- The attempted in specie payment by the Fund pursuant to its Memorandum and Articles was impermissible.
The Fund appealed, contending that both of these findings were incorrect. The Court of Appeal upheld the Appeal and dismissed the Joint Liquidators. Reasons for the decision are pending and are awaited with great interest.