Solvent Liquidations Of Funds In The British Virgin Islands

Introduction

As a regulated entity, the statutory considerations relevant to the solvent liquidation of a fund domiciled and regulated in the British Virgin Islands ("BVI") are, as might be expected, more stringent than those applying to unregulated entities domiciled in the BVI.

This note deals with solvent liquidations of BVI funds (being private, professional or public funds licensed under the Mutual Funds Act, 1996). Close-ended funds, which are not regulated in the BVI, will not be subject to these statutory considerations. Similarly, insolvent liquidations are subject to different considerations under Insolvency Act, 2003.

Whilst BVI companies are free to chose any person to act as their liquidator in the event of a solvent liquidation under the BVI Business Companies Act, 2004 ("BCA"), provided that the liquidator is an "eligible individual" (an eligible person essentially being a real person who is not connected to the company, ie not a director), under