• In Irving H. Picard v Bernard L. Madoff Investment Securities LLC, BVIHCV 0140/2010, the trustee appointed in the liquidation of the business of Bernard L. Madoff Investment Securities LLC (“Picard” and “BLMIS”) sought, amongst other things, (i) recognition in the BVI as a foreign representative; (ii) an entitlement to apply to the BVI Court for orders in aid of the foreign proceeding; and (iii) an entitlement to require any person to deliver up to him any property of BLMIS.
  • Bannister J. rejected the application as originally presented, holding that the common law concept of recognition has no place under the BVI legislation, having been expressly provided for and codified in the Insolvency Act 2003. Part XVIII of the Insolvency Act has not yet been brought into force and therefore, Bannister J. held, foreign representatives are confined to relying upon Part XIX which operates on an “application-by-application” basis. The key difference between the two is that whereas Part XVIII confers status on foreign representatives through recognition of the foreign proceedings, Part XIX merely gives the foreign representative express rights to apply to the Court for orders in aid, but without conferring status.
  • However, Bannister J. made it clear on 11 November 2010 that he accepted that Picard was a foreign representative within the meaning of Part XIX Insolvency Act. We understand that the Commercial Court judge also made a number of remarks during the course of the hearing to the effect that he wanted to do all that he could to assist Picard and the US Bankruptcy Court.
  • In essence, the Commercial Court took the view that it did not have the power to make a declaration of formal recognition 'in a vacuum', especially on an application that was effectively unopposed. However, the Court could - and would - give Picard every assistance on a case by case basis.
  • The subsequent application, which was granted, was for Picard (in his capacity as a foreign representative) to have permission under s.175 IA to file claim forms against the Kingate funds, as they are in liquidation; Picard wished to issue protective writs/claim forms in order to preserve his rights to bring certain actions based on US Bankruptcy Law, for which there was a 2-year deadline expiring 11 December 2010.