Bermuda's ‘Light-Touch' Approach to Cross-Border Restructuring

Bermuda has no direct equivalent to the statutory moratorium against creditor action that applies to an insolvent English company in administration proceedings pursuant to Schedule B1 to the Insolvency Act 1986, or to an American corporate reorganisation pursuant to Chapter 11 of the United States Bankruptcy Code. This legislative gap has been enthusiastically filled by the Bermuda Supreme Court's interpretation of the power to appoint liquidators or provisional liquidators under section 170 of the Companies Act 1981 (the 'Act') as including the power to appoint provisional liquidators for restructuring purposes. This article explains how for almost twenty years now, de facto debtor-in-possession, management-led restructurings have been facilitated in Bermuda by reference to this bespoke restructuring regime.