Offshore insolvency petitions on the rise
The number of insolvency petition filings in offshore jurisdictions was up significantly in 2017 when compared to the previous year, according to a report from offshore law firm Appleby.
A total of 296 compulsory winding-up petitions were submitted to offshore courts in 2017, up 48% over the previous year, with 135 winding up orders made. Across the offshore region, the average conversion rate of petitions to orders was 64%.
Source: Appleby’s Snapshot Offshore Insolvency & Restructuring Annual Review: 2017
The overall rise in petition filings was due in large part to increased filings in the British Virgin Islands and Mauritius which offset falls in the Cayman Islands and Isle of Man.
The BVI stands out as 75 applications were made for a court-appointed liquidator, almost double the 2016 total, as the jurisdiction was home to significant insolvencies, particularly in the natural resources sector and with various Asian conglomerates, according to the report.
“Although the number of petition filings declined in some centres, we saw numerous complex restructuring cases in 2017, with major cross-border restructurings of oil and gas service providers in Cayman, BVI and Bermuda,” said Tony Heaver-Wren, a dispute resolution partner in Appleby’s Cayman office.
The report examined notices published across four categories: compulsory winding up filings, conversion of voluntary liquidation to court supervised liquidation, schemes of arrangement and capital reduction.
The firm’s Snapshot Offshore Insolvency & Restructuring Annual Review: 2017, examines company petition filings and resulting court orders in Bermuda, the British Virgin Islands, Cayman Islands, Guernsey, the Isle of Man and Mauritius.