Bankruptcy of individuals is usually referred to as "personal bankruptcy" in Anguilla, whereas the bankruptcy of corporations is referred to as "corporate insolvency". The legislation largely deals with both separately, although there are some common provisions.
Personal bankruptcy
Personal bankruptcy is regulated under the Bankruptcy Act (Cap B.15). Under that statute, a person commits an act of bankruptcy if he or she:[1]
makes a conveyance or assignment of his property to a trustee or trustees for the benefit of his creditors generally;
makes a fraudulent conveyance, gift, delivery, or transfer of his property, or any part thereof;
makes any conveyance or transfer of his property, or any part thereof, or creates any charge thereon, which would under this or any other Act be void as a fraudulent preference if he were adjudged bankrupt;
with intent to defeat or delay his creditors he departs out of Anguilla, or being out of Anguilla remains out of Anguilla, or departs from his dwelling house, or otherwise absents himself, or begins to keep house;
execution having issued against him, has been levied by seizure and sale of his goods under process in an action in any court, or in any civil proceeding;
if any judgment debt has been ordered by the Court to be levied upon any lands[2] or any mortgage, encumbrance or interest in or upon such land;
files in the Court a declaration of his inability to pay his debts, or presents a bankruptcy petition against himself or herself;
if a creditor has obtained a final judgment against him for any amount, and execution thereon not having been stayed, and he does not, within the time provided, either comply with the requirements of the notice, or satisfy the Court that he has a counterclaim, set off or cross demand which equals or exceeds the amount of the judgment debt;
if the debtor gives notice to any of his creditors that he has suspended, or that he is about to suspend, payment of his debts; or
if the debtor has in fact suspended payment of his debts and given notice to any of his creditors that he is insolvent.
If any of those conditions are made out, then the court may make a "receiving order" (which is the name for what is ordinarily called a bankruptcy order in Anguilla).[3] On the making of a receiving order a receiver is constituted "receiver" of the property of the debtor, and thereafter no creditor to whom the debtor is indebted in respect of any debt provable in bankruptcy shall have any remedy against the debtor in respect of the debt or shall commence any action or other legal proceedings unless with the leave of the Court, and on such terms as the Court may impose.[4] Thereafter a meeting of creditors is convened,[5] and they may by resolution of 75% of creditors in value seek to implement an arrangement or compromise in relation to the debts of the bankrupt.[6] If the meeting is not successful in implementing a scheme, then the court will appoint a trustee in bankruptcy who will divide the property of the bankrupt between his creditors in the discharge of their claims.[7]
Anguilla.
Corporate insolvency
Anguillan corporate insolvency law is presently highly fragmented, with various different parts of appearing in either the Bankruptcy Act (Cap B.15) or the Companies Act (Cap C.65). However, the matrix of laws is nonetheless fragmentary and incomplete. At present there are no provisions under Anguillan law in relation to corporate insolvency which address insolvency set-off, or the avoidance of dispositions after the commencement of winding-up. There are also no powers conferred upon the liquidator specifically relating to challenging transactions entered into the "twilight" period which prejudice the general body of creditors, but there is limited scope to seek redress for such transactions outside of the insolvency regime under the Fraudulent Dispositions Act (Cap F.60).
However, the legislature is currently considering a comprehensive new Insolvency Act which will both close all of the relevant gaps in the law, and consolidate all related laws relating to both corporate insolvency and personal bankruptcy into a single statute.[8]
Where a liquidator over a company is appointed (either voluntarily or by the court), the liquidator's primary duty is to collect in all of the company's assets and then distribute them pari passu to the company's creditors. The law confers wide powers upon the liquidator to enable him to do so. Once a liquidator is appointed, unsecured creditors cannot commence legal proceedings against the insolvent company without the leave of the court, and any rights of action against the company are converted into claims in the liquidation process. Any disposition of property by the company after the commencement of winding-up is void unless the court otherwise orders.
Secured creditors generally do not participate in the liquidation process, and may continue to proceed with any enforcement action directly against their collateral pursuant to a valid security interest.
Anguillan law provides for statutory netting relating to financial contracts under the Netting Act (Cap N.03), and this will prevail over any other off provisions arising by law.[9]
†Physiographically, these continental islands are not part of the volcanic Windward Islands arc, although sometimes grouped with them culturally and politically.
#Bermuda is an isolated North Atlanticoceanic island, physiographically not part of the Lucayan Archipelago, Antilles, Caribbean Sea nor North American continental nor South American continental islands. It is grouped with the Northern American region, but occasionally also with the Caribbean region culturally.
Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debtor.
A creditor or lender is a party that has a claim on the services of a second party. It is a person or institution to whom money is owed. The first party, in general, has provided some property or service to the second party under the assumption that the second party will return an equivalent property and service. The second party is frequently called a debtor or borrower. The first party is called the creditor, which is the lender of property, service, or money.
In the United States, bankruptcy is largely governed by federal law, commonly referred to as the "Bankruptcy Code" ("Code"). The United States Constitution authorizes Congress to enact "uniform Laws on the subject of Bankruptcies throughout the United States". Congress has exercised this authority several times since 1801, including through adoption of the Bankruptcy Reform Act of 1978, as amended, codified in Title 11 of the United States Code and the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA).
In accounting, insolvency is the state of being unable to pay the debts, by a person or company (debtor), at maturity; those in a state of insolvency are said to be insolvent. There are two forms: cash-flow insolvency and balance-sheet insolvency.
A fraudulent conveyance or fraudulent transfer is an attempt to avoid debt by transferring money to another person or company. It is generally treated as a civil cause of action that arises in debtor/creditor relations, typically brought by creditors or by bankruptcy trustees against insolvent debtors, but in some jurisdictions there is potential for criminal prosecution.
Consumer bankruptcy in Canada is governed by the Bankruptcy and Insolvency Act ("BIA"). The legislation is complemented by regulations, as well as directives from the Office of the Superintendent of Bankruptcy that provide guidelines to trustees in bankruptcy on various aspects of the BIA.
An officer of the Insolvency Service of the United Kingdom, an official receiver (OR) is an officer of the court to which they are attached. The OR is answerable to the courts for carrying out the courts' orders and for fulfilling their duties under law. They also act on directions, instructions and guidance from the service's Inspector General or, less often, from the Secretary of State for Business, Energy and Industrial Strategy.
The Bankruptcy and Insolvency Act is one of the statutes that regulates the law on bankruptcy and insolvency in Canada. It governs bankruptcies, consumer and commercial proposals, and receiverships in Canada.
An unfair preference is a legal term arising in bankruptcy law where a person or company transfers assets or pays a debt to a creditor shortly before going into bankruptcy, that payment or transfer can be set aside on the application of the liquidator or trustee in bankruptcy as an unfair preference or simply a preference.
An undervalue transaction is a transaction entered into by a company who subsequently goes into bankruptcy which the court orders be set aside, usually upon the application of a liquidator for the benefit of the debtor's creditors. This can occur where the transaction was seriously disadvantageous to the company and the company was insolvent or in immediate risk of becoming insolvent.
United Kingdom insolvency law regulates companies in the United Kingdom which are unable to repay their debts. While UK bankruptcy law concerns the rules for natural persons, the term insolvency is generally used for companies formed under the Companies Act 2006. Insolvency means being unable to pay debts. Since the Cork Report of 1982, the modern policy of UK insolvency law has been to attempt to rescue a company that is in difficulty, to minimise losses and fairly distribute the burdens between the community, employees, creditors and other stakeholders that result from enterprise failure. If a company cannot be saved it is liquidated, meaning that the assets are sold off to repay creditors according to their priority. The main sources of law include the Insolvency Act 1986, the Insolvency Rules 1986, the Company Directors Disqualification Act 1986, the Employment Rights Act 1996 Part XII, the EU Insolvency Regulation, and case law. Numerous other Acts, statutory instruments and cases relating to labour, banking, property and conflicts of laws also shape the subject.
The Fraudulent Conveyances Act 1571, also known as the Statute of 13 Elizabeth, was an Act of Parliament in England, which laid the foundations for fraudulent transactions to be unwound when a person had gone insolvent or bankrupt. In the United Kingdom, the provisions contained in the 1571 Act were replaced by Part IX of the Law of Property Act 1925, which has since been replaced by Part XVI of the Insolvency Act 1986.
The Parliament of Canada has exclusive jurisdiction to regulate matters relating to bankruptcy and insolvency, by virtue of Section 91(2) of the Constitution Act, 1867. It has passed the following statutes as a result:
Bankruptcy in Irish Law is a legal process, supervised by the High Court whereby the assets of a personal debtor are realised and distributed amongst his or her creditors in cases where the debtor is unable or unwilling to pay his debts.
Commercial insolvency in Canada has options and procedures that are distinct from those available in consumer insolvency proceedings. It is governed by the following statutes:
British Virgin Islands bankruptcy law is principally codified in the Insolvency Act, 2003, and to a lesser degree in the Insolvency Rules, 2005. Most of the emphasis of bankruptcy law in the British Virgin Islands relates to corporate insolvency rather than personal bankruptcy. As an offshore financial centre, the British Virgin Islands has many times more resident companies than citizens, and accordingly the courts spend more time dealing with corporate insolvency and reorganisation.
Cayman Islands bankruptcy law is principally codified in five statutes and statutory instruments:
Anguillan company law is primarily codified in three principal statutes:
the International Business Companies Act ;
the Companies Act ; and
the Limited Liability Companies Act.
Australian insolvency law regulates the position of companies which are in financial distress and are unable to pay or provide for all of their debts or other obligations, and matters ancillary to and arising from financial distress. The law in this area is principally governed by the Corporations Act 2001. Under Australian law, the term insolvency is usually used with reference to companies, and bankruptcy is used in relation to individuals. Insolvency law in Australia tries to seek an equitable balance between the competing interests of debtors, creditors and the wider community when debtors are unable to meet their financial obligations. The aim of the legislative provisions is to provide:
Hong Kong insolvency law regulates the position of companies which are in financial distress and are unable to pay or provide for all of their debts or other obligations, and matters ancillary to and arising from financial distress. The law in this area is now primarily governed by the Companies Ordinance and the Companies Rules. Prior to 2012 Cap 32 was called the Companies Ordinance, but when the Companies Ordinance came into force in 2014, most of the provisions of Cap 32 were repealed except for the provisions relating to insolvency, which were retained and the statute was renamed to reflect its new principal focus.
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