Virgin Islands Insolvency Act (Revised 2020)

VIRGIN ISLANDS
INSOLVENCY ACT
Revised Edition showing the law as at 1 January 2020 This is a revised edition of the law, prepared by the Law Revision Commissioner under the authority of the Law Revision Act 2014. This edition contains a consolidation of the following laws—
Page
INSOLVENCY ACT 3
Act 5 of 2003 .. in force 16 August 2004 (S.I. 47/2004) Amended by Acts: 11 of 2004 .. Paragraphs 2(a), 2(b) and 4 – in force 8 December 2006 Remainder - 1 January 2006 (S.I. 57/2004) 16 of 2004 .. in force 1 January 2005 19 of 2006 .. in force 15 January 2007 1 of 2008 .. in force 1 February 2010 (S.I. 63/2009) 14 of 2019 .. in force 24 December 2019 SEE STATUTORY INSTRUMENTS BOOKLET

Published in 2021
On the authority and on behalf of the Government of The Virgin Islands by The Regional Law Revision Centre Inc. For information contact— Attorney General’s Chambers Government of the Virgin Islands P.O. Box 242 Road Town Tortola, VG1110 British Virgin Islands Tel: (284) 468 - 2960 Email: agc@gov.vg Printed on the authority and on behalf of the Government of The Virgin Islands by The Regional Law Revision Centre Inc. P.O. Box 1626, 5 Mar Building, The Valley, AI-2640, Anguilla Authorised Printers for this Revised Edition

LAW OF VIRGIN ISLANDS Insolvency Act 3 Revision Date: 1 Jan 2020 INSOLVENCY ACT ARRANGEMENT OF SECTIONS
PART I
PRELIMINARY PROVISIONS
SECTION

Short title
Interpretation
Meaning of “company”
Meaning of “subsidiary” and “holding company”
Meaning of “connected person” and “related company”
Meaning of “director”
Meaning of “unlicensed financial services business”
Meaning of “insolvent”
Meaning of “creditor”, “secured creditor” etc.
Meaning of “liability”
Admissible claims
Non-admissible claims
Meaning of “public document”
PART II
CREDITORS’ ARRANGEMENTS
Division 1
Interpretation
Interpretation for and scope of this Part
Arrangements
Remuneration of supervisor and interim supervisor
Fixing of remuneration by Court
Commission’s rights in respect of a regulated person
Division 2
Company Creditors’ Arrangement
Interpretation and scope of Division
Proposal and Interim Supervisor
Proposal for an arrangement by board
Appointment of interim supervisor by board

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22. Appointment of interim supervisor, company in administration or
liquidation
23. Administrator or liquidator acting as interim supervisor
24. Notification of appointment of interim supervisor
25. Functions of interim supervisor and power to obtain information
26. Amendment of proposal before creditors’ meeting
Meeting of Creditors
27. Calling creditors’ meeting
28. Interim supervisor may require certain persons to attend creditors’ meeting
29. Attendance of members and directors at creditors’ meeting
30. Business to be conducted at creditors’ meeting
31. Amendment or withdrawal of proposal at creditors’ meeting
32. Report on outcome of creditors’ meeting
33. Notification of appointment of supervisor
34. Effect of approval of proposal
Implementation of Arrangement
35. Supervisor to be given possession of assets included in arrangement
36. Supervisor’s duty to keep accounting records
37. Supervisor to prepare and send out regular accounts and reports
38. Completion or premature termination of arrangement
Modification of Arrangement
39. Supervisor may propose modification of arrangement
40. Modification of arrangement
Applications to Court
41. Appointment of interim supervisor or supervisor by Court
42. Application where arrangement approved or modified
43. Application on grounds of unfair prejudice
44. Application to Court by former supervisor or interim supervisor
Offences
45. False representations etc.
Division 3
Individual Creditors’ Arrangement
46. Interpretation for and scope of this Division

LAW OF VIRGIN ISLANDS Insolvency Act 5 Revision Date: 1 Jan 2020 Proposal
47. Proposal
48. Notification of appointment of interim supervisor
49. Functions of interim supervisor and power to obtain information
50. Amendment of proposal after appointment of interim supervisor
Moratorium
51. Application for moratorium order
52. Court may grant stay
53. Moratorium order
54. Duty of interim supervisor to report certain matters to the Court
55. Effect of moratorium order
Consideration of Proposal
56. Interim supervisor’s report on debtor’s proposal
57. Extension of moratorium
58. Calling creditors’ meeting
59. Decisions of creditors’ meetings
60. Amendment or withdrawal of proposal at creditors’ meeting
61. Report of decisions to Court
62. Effect of approval
Implementation of Arrangement
63. Supervisor to be given possession of assets included in arrangement
64. Supervisor’s duty to keep accounting records
65. Supervisor to prepare and send out regular accounts and reports
66. Completion or premature termination of arrangement
Modification of Arrangement
67. Supervisor may propose modification of arrangement.
68. Modification of arrangement
Applications to Court
69. Appointment of interim supervisor or supervisor
70. Application in respect of moratorium
71. Application where arrangement approved or modified
72. Application on grounds of unfair prejudice

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Miscellaneous
73. Register of arrangements
Offences
74. False representations etc.
PART III
ADMINISTRATION
Preliminary
75. Interpretation for and scope of this Part
Administration Orders
76. Meaning of administration order
77. Court may make an administration order
78. Application in respect of insurance companies
79. Powers of Court on hearing of application for administration order
80. Application where company in liquidation
81. Effect of administration order
82. Notification and advertisement of administration order
Moratorium
83. Moratorium period
84. Effect of moratorium
85. Preservation of charged and other assets
86. Disposal of perishable assets during moratorium period
Administrators
87. General duties of administrator
88. Duty to prepare report
89. Duty to report to Commission
90. General powers of administrator
91. Power to deal with assets subject to floating charge
92. Application to Court to deal with other charged assets
93. Administrator as agent of company
94. Removal and resignation of administrator
95. Appointment of replacement administrator
96. Remuneration of administrator
97. Administrator to have charge over assets of company
98. Release of administrator
99. Statement of affairs

LAW OF VIRGIN ISLANDS Insolvency Act 7 Revision Date: 1 Jan 2020 Administrator’s Proposals
100. Administrator’s proposals and creditors meeting
101. Attendance at meeting of directors and others
102. Consideration of proposals by creditors
103. Amendment of proposals at creditors’ meeting
104. Modification of proposals
Miscellaneous
105. Commission’s rights where company a regulated person
106. Administrator’s duty to keep accounting records
107. Administrator to prepare and send out regular accounts and reports
108. Notification
109. Meetings of creditors
110. Discharge or variation of administration order
111. Appointment of liquidator or dissolution of company on discharge of
administration order
112. Filing copy of discharge order with Registrar
Protection of Interests of Creditors and Members
113. Application in respect of moratorium period
114. Application on grounds of unfair prejudice
PART IV
RECEIVERSHIP
Preliminary
115. Interpretation for and scope of this Part
General
116. Persons not to be appointed or act as receiver
117. Appointment of joint receivers
118. Notice of appointment
119. Notification of receivership
120. Vacation of office
121. Assistance to be provided by receiver vacating office
122. Resignation of receiver
123. Removal of receiver
124. Co-operation with receiver
125. Duty to report to Commission
126. Agency
127. Powers of receiver, other than administrative receiver
128. General duties of receivers

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129. Powers of sale and proceeds of sale
130. Liabilities of receivers
131. Payment of debts out of assets subject to a floating charge
132. Court directions
133. Further provisions with respect to an order under section 132
134. Remuneration of receivers
135. Accounting records
136. Receivership accounts to be filed with Registrar
137. Enforcement of duty to make returns
138. Completion of receivership
Receivers Appointed out of Court
139. Appointment of receiver out of court
140. Execution of documents
141. Invalid appointment
Administrative Receivers
142. Meaning of “administrative receiver”
143. Appointment of administrative receiver by Court
144. Powers of administrative receiver
145. Power to dispose of charged assets
146. Statement of affairs
147. Report by administrative receiver
148. Application for permission not to call meeting of creditors
PART V
PROVISIONS APPLICABLE TO THE LIQUIDATION OF COMPANIES AND TO THE BANKRUPTCY OF INDIVIDUALS
149. Interpretation
150. Insolvency set-off
151. Validity of agreement to subordinate debt
152. Quantification of claims in liquidation and bankruptcy
153. Interest on claims
154. Claim in currency other than dollars
155. Statutory demand
156. Application to set aside statutory demand
157. Hearing to set aside statutory demand

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PART VI
LIQUIDATION
Preliminary
158. Application of this Part to Official Receiver
159. Appointment of liquidator
160. Duration of liquidation
161. Appointment of liquidator by members
162. Appointment of liquidator by court
163. Appointment of liquidator of a foreign company
164. Withdrawal of application
165. Advertisement of application
166. Substitution of applicant
167. Court’s power on hearing of an application
168. Period within which application shall be determined
169. Expenses of an arrangement
Interim Relief
170. Appointment of provisional liquidator
171. Rights and powers of provisional liquidator
172. Remuneration of provisional liquidator
173. Termination of appointment of provisional liquidator
174. Power to stay or restrain proceedings etc.
Effect of Liquidation
175. Effect of liquidation
176. Restriction on execution or attachment
177. Duties of officer in execution of process
Notice of Appointment and First Meetings of Creditors
178. Notice of appointment of liquidator
179. Liquidator to call first meeting of creditors
180. Application to Court by members
181. Application of sections 178 and 179
182. Restrictions on powers of liquidator appointed by members
183. Court appointed liquidator may dispense with creditors’ meeting
Liquidators
184. Status of liquidator
185. General duties of liquidator
186. General powers of liquidator
187. Removal of liquidator

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188. Resignation of liquidator
189. Appointment of replacement liquidator
190. Remuneration of liquidator
191. Notification of liquidation
192. Vesting of assets in liquidator
Members
193. Settlement of list of members
194. Rectification of register of members
195. Liability of members limited
196. Liability of past members
197. Dividends payable to member
198. Liability where limited company becomes unlimited company
199. Liability where unlimited company becomes limited company
200. Liability of personal representative
201. Effect of member or past member becoming bankrupt
202. Status of personal representative or trustee in bankruptcy
203. Insurance and other contracts not affected
204. Power of liquidator to enforce liability of member or past member
205. Summary remedy against members and past members
206. Order under section 205 to be conclusive evidence
207. Distribution of assets of company
Claims
208. Claims having priority over floating charges
209. Claims by unsecured creditors
210. Variation, withdrawal and expunging of claims
211. Claims by secured creditors
212. Redemption of security interest by liquidator
213. Realisation of security interest by secured creditor
214. Surrender for non-disclosure
215. Interest after commencement of liquidation
216. Power to exclude creditors not claiming in time
Disclaimer
217. Liquidator may disclaim onerous property
218. When disclaimer takes effect
219. Notice to liquidator to elect whether to disclaim
220. Effect of disclaimer
221. Vesting orders and orders for delivery
222. Vesting orders in respect of leases
223. Land subject to rentcharge
224. Disclaimer presumed valid

LAW OF VIRGIN ISLANDS Insolvency Act 11 Revision Date: 1 Jan 2020 Investigation of Assets and Affairs of Company
225. Statement of affairs
226. Preliminary report
227. Duty of Official Receiver concerning report under section 226
Miscellaneous Provisions
228. Liquidator to call meetings of creditors
229. Recession of contracts by the Court
230. Inspection of books by creditors
231. Enforcement of liquidator’s duties
Termination of Liquidation
232. Termination of liquidation
233. Order terminating liquidation
234. Completion of liquidation
235. Release of liquidator
236. Dissolution
PART VII
LIQUIDATION OF INSURANCE COMPANIES
237. Interpretation for and scope of this Part
238. Liquidation of insurance companies
239. Appointment of liquidator by members
240. Application for appointment of liquidator by Court
241. Reduction of contracts as alternative to winding up
242. Continuation of long term business by liquidator appointed by Court
243. Protection of segregated funds and assets
PART VIII
VOIDABLE TRANSACTIONS
244. Interpretation for this Part
245. Unfair preferences
246. Undervalue transactions
247. Voidable floating charges
248. Extortionate credit transactions
249. Orders in respect of voidable transactions
250. Limitations on orders under section 249
251. Recoveries
252. Remedies not exclusive

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PART IX
MALPRACTICE
253. Interpretation for this Part
254. Summary remedy against delinquent officers and others
255. Fraudulent trading
256. Insolvent trading
257. Recoveries under sections 255 and 256
258. Ancillary orders
PART X
DISQUALIFICATION ORDERS AND UNDERTAKINGS
259. Interpretation for this Part
260. Disqualification orders and undertakings
261. Application for disqualification order
262. Hearing of application for disqualification order
263. Matters for determining unfitness of directors
264. Disqualification undertaking
265. General provisions concerning disqualification orders and undertakings
266. Variation of disqualification order or undertaking
267. Offence provisions
268. Liability for engaging in prohibited activity
269. Official Receiver to appear on certain applications
270. Register of disqualification orders
271. Duties of office holders
PART XI
GENERAL PROVISIONS WITH REGARD TO COMPANIES THAT ARE INSOLVENT OR IN LIQUIDATION Division 1 General
272. Interpretation
273. Application to Court concerning office holder
274. Company’s books
274A. Order to deliver assets and documents Division 2 Statement of Affairs
275. Interpretation for this Division
276. Notice to be given by office holder
277. Statement of Affairs

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278. Affidavit of concurrence
279. Release from duty to submit statement of affairs
280. Application for order of limited disclosure
Division 3
Investigation of Insolvent Company’s Affairs Office Holder’s Powers
281. Interpretation for this Division
282. Power to obtain information
283. Examination by office holder
Examination Before Court
284. Application for examination before Court
285. Order for examination
286. Conduct of examination
287. Incriminating answers and admissibility of record
288. Offence
Division 4
Offence Provisions
289. Fraudulent conduct
PART XII
BANKRUPTCY
Preliminary
290. Interpretation
291. Application of this Part to Official Receiver
Bankruptcy Order
292. Meaning and duration of bankruptcy order
293. Conditions for making of bankruptcy order
294. Persons who may apply for a bankruptcy order
295. Application by debtor
296. Creditor’s application
297. Substitution of applicant
298. Application by secured creditor
299. Secured creditor failing to disclose security interest
300. Hearing of creditor’s application

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301. Application where individual creditors’ arrangements in place
302. Consolidation of applications
303. Withdrawal of application
304. Court’s powers on hearing of application for bankruptcy order
305. Appointment of bankruptcy trustee
306. Period within which application shall be determined
Interim Relief
307. Protection of assets after application for bankruptcy
308. Effect of order under section 307
309. Remuneration of person appointed under section 307
310. Examination
Effect of Bankruptcy
311. Effect of bankruptcy order
312. Power to stay or restrain proceedings
Bankrupt’s Estate
313. Definition of bankrupt’s estate
314. Acquisition by trustee of control of bankrupt’s estate
315. Goods subject to pledge etc.
316. Duties of bankrupt in relation to his or her assets and affairs
317. Delivery up by other persons
318. After-acquired assets
319. Vesting in trustee of certain items of excess value
320. Money provided in lieu of sale
321. Time limit for notice under sections 318 or 319
322. Income payments orders
Bankruptcy Trustee
323. Bankruptcy trustee officer of Court
324. General duties of trustee
325. Powers of trustee
326. Notice of appointment
327. Appointment of trustee in place of Official Receiver
328. Removal of trustee
329. Resignation of trustee
330. Appointment of replacement trustee
331. Remuneration of trustee
332. General control of trustee by the Court

LAW OF VIRGIN ISLANDS Insolvency Act 15 Revision Date: 1 Jan 2020 Administration by Trustee
333. Meetings of creditors
Claims and Distribution of Estate
334. Distribution of bankrupt’s estate
335. Debts to spouse
336. Claims by unsecured creditors
337. Variation, withdrawal and expunging of claims
338. Claims by secured creditors
339. Redemption of security interest by trustee
340. Realisation of security interest by secured creditor
341. Surrender for non-disclosure
342. Interest after commencement of bankruptcy
343. Distribution by means of dividend
344. Claims by unsatisfied creditors
345. Distribution of assets in specie
346. Final distribution
347. No action for dividend
348. Right of bankrupt to surplus
349. Final meeting
Prior Transactions
350. Contracts to which bankrupt is a party
351. Enforcements procedures
352. Distress, etc.
353. Unenforceability of liens on books, etc.
General Powers of Court
354. General control of Court
355. Power of arrest
356. Seizure of bankrupt’s assets
357. Re-direction of bankrupt’s letters, etc.
Disclaimer
358. Trustee may disclaim onerous property
359. When disclaimer takes effect
360. Notice to trustee to elect whether to disclaim
361. Effect of disclaimer
362. Vesting orders and orders for delivery
363. Vesting orders in respect of leases
364. Land subject to rentcharge
365. Disclaimer presumed valid

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Investigation of Bankrupt’s Affairs
366. Statement of assets and liabilities
367. Preliminary report
368. Duty of Official Receiver concerning report under section 367
369. Application for examination of bankrupt and others
370. Order for examination
371. Conduct of examination
372. Examinee shall answer questions put to him or her
373. Examinee failing to appear for his or her examination
374. Court’s enforcement powers
Discharge and Annulment of Bankruptcy
375. Bankrupt ineligible for automatic discharge
376. Automatic discharge
377. Application by bankrupt concerning order for suspension of discharge
378. Application for discharge by Court order
379. Court order on application for discharge
380. Effect of discharge
381. Discharged bankrupt to give assistance
382. Annulment of bankruptcy order
383. Release of trustee
384. Liability of trustee
Second or Subsequent Bankruptcy
385. Stay of distribution in case of second bankruptcy
386. Adjustment between earlier and later bankruptcy estates
PART XIII
BANKRUPTCY OFFENCES
387. Definitions
388. Defence of innocent intention
389. Non-disclosure
390. Concealment of assets
391. Concealment of books and papers; falsification
392. False statements
393. Fraudulent disposal of assets
394. Absconding
395. Fraudulent dealing with asset obtained on credit
396. Obtaining credit: engaging in business
397. Failure to keep proper accounts of business
398. Gambling
399. Supplementary provisions

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PART XIV
VOIDABLE TRANSACTIONS
400. Interpretation for this Part
401. Unfair preferences
402. Undervalue transactions
403. Voidable general assignment of book debts
404. Extortionate credit transactions
405. Orders in respect of voidable transactions
406. Limitations on orders under section 405
407. Recoveries
408. Remedies not exclusive
PART XV
BANKRUPTCY RESTRICTIONS ORDERS AND UNDERTAKINGS
409. Interpretation for this Part
410. Bankruptcy restrictions orders and undertakings
411. Application for and hearing of application for bankruptcy restrictions order
412. Duration of bankruptcy restrictions order
413. Interim bankruptcy restrictions order
414. Bankruptcy restrictions undertaking
415. Variation of disqualification order or undertaking
416. Offence provisions
417. Official Receiver to appear on certain applications
418. Register of disqualification orders
419. Annulment of bankruptcy order
PART XVI
GENERAL PROVISIONS WITH REGARD TO
INSOLVENCY PROCEEDINGS UNDER THIS ACT
Division 1
The Creditors’ Committee
420. Interpretation for and scope of this Division
421. Establishment of creditors’ committee
422. Functions and powers of creditors’ committee
423. Composition of creditors’ committee
424. Resignation and termination of committee member
425. Vacancies and appointment of new members
426. Proceedings of creditors’ committee
427. Expenses of members
428. Members dealing with company
429. Formal defects

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Division 2
Remuneration
430. Remuneration of administrator, liquidator or bankruptcy trustee
431. Application by creditors for reduction of remuneration
432. General principles to be applied in fixing remuneration
433. Time for fixing remuneration and interim payments
PART XVII
NETTING AND MARKET CONTRACTS
434. Interpretation for sections 434 and 435
435. Enforcement of netting agreements etc.
PART XVIII
CROSS-BORDER INSOLVENCY
General Provisions
436. Purpose and scope of this Part
437. Interpretation for this Part
438. International obligations of the Virgin Islands
439. Public policy exception
440. Additional assistance
441. Application under this Part
442. Authorisation of insolvency officer to act in a foreign country
Access of Foreign Representatives and Creditors to Courts in The Virgin Islands
443. Right of direct access
444. Limited jurisdiction
445. Commencement of and participation in a Virgin Islands insolvency
proceeding by foreign representative
446. Access of foreign creditors to a Virgin Islands proceeding
447. Notification to foreign creditors of a Virgin Islands insolvency proceeding
Recognition of Foreign Proceeding and Relief
448. Application for recognition of foreign proceeding
449. Presumptions concerning recognition
450. Recognition of foreign proceedings
451. Subsequent information
452. Interim relief
453. Effects of recognition of foreign main proceeding
454. Relief that may be granted upon recognition of foreign proceeding

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455. Protection of creditors and other interested persons
456. Actions to avoid acts detrimental to creditors
457. Intervention by foreign representative in proceedings in the Virgin Islands
Cooperation with Foreign Courts and
Foreign Representatives
458. Cooperation and direct communication between court of the Virgin Islands
and foreign courts or foreign representatives
459. Cooperation and direct communication between the insolvency
administrator and foreign courts or foreign representatives
460. Forms of cooperation
Concurrent Proceedings
461. Commencement of a Virgin Islands insolvency proceeding after
recognition of foreign main proceeding
462. Coordination of a Virgin Islands insolvency proceeding and foreign
proceeding
463. Coordination of more than one foreign proceeding
464. Presumption of insolvency based on recognition of foreign main
proceeding
465. Rule of payment in concurrent proceedings
PART XIX
ORDERS IN AID OF FOREIGN PROCEEDINGS
466. Interpretation for this Part
467. Order in aid of foreign proceeding
468. Matters to be considered by Court in determining application under section
467
469. Limitation on effect of application under this Part
470. Additional assistance
471. Application under this Part
472. Authorisation of insolvency officer to act in foreign country
PART XX
INSOLVENCY PRACTITIONERS
Licensing
473. Interpretation for this Part
474. Prohibition on acting as insolvency practitioner without a licence
475. Application for licence
476. Issue of licence

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477. Persons disqualified from holding a licence
Control of Licensees and Enforcement
478. Production of accounts and records
479. Suspension and revocation of licence
480. Right to make representations
480A. Directives
Obligations of Licensees
481. Filing of returns and other documents
Eligible Insolvency Practitioners
482. Eligible insolvency practitioner
483. Appointment of overseas insolvency practitioner
484. Commission’s powers with regard to appointment of overseas insolvency
practitioner
485. Overseas practitioner sole appointee
486. Regulations
487. Code of Practice
487A. Insolvency Surplus Account
PART XXI
OFFICIAL RECEIVER
488. Official Receiver
489. Deputy Official Receiver and staff
490. Official Receiver as officer of the Court
491. Functions of Official Receiver
492. Right of audience
PART XXII
MISCELLANEOUS PROVISIONS
493. Appointment of two or more office holders
494. Use of prescribed forms
495. Notices
496. Time
497. Resolutions
498. Rules
499. Insolvent partnerships
500. Insolvent estates
501. Offences, general provisions

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502. Rules may provide for offences and penalties
503. Provisions of other enactments not to apply
503A. Disapplication and modification of the Financial Services Commission Act
504. (Omitted)
505. Act binding on Crown
SCHEDULE 1: Powers of Administration and Administrative Receiver
SCHEDULE 2: Powers of Liquidator
SCHEDULE 3: Liquidation of Foreign Company
SCHEDULE 4: Powers of Bankruptcy Trustee
SCHEDULE 5: Offences Under this Act
SCHEDULE 6: Disapplication and Modification of Financial Services
Commission Act

LAW OF VIRGIN ISLANDS Insolvency Act 23 Revision Date: 1 Jan 2020 INSOLVENCY ACT (Acts 5 of 2003, 11 of 2004, 16 of 2004, 19 of 2006 and 1 of 2008) AN ACT TO REFORM THE LAW RELATING TO THE INSOLVENCY OF COMPANIES AND FOREIGN COMPANIES, LIMITED PARTNERSHIPS, PARTNERSHIPS AND INDIVIDUALS AND TO PROVIDE, IN PARTICULAR, FOR A MECHANISM FOR INSOLVENT PERSONS TO ENTER INTO ARRANGEMENTS WITH THEIR CREDITORS, AN ADMINISTRATION PROCEDURE FOR COMPANIES, THE RECEIVERSHIP OF COMPANIES AND FOREIGN COMPANIES, THE LIQUIDATION OF COMPANIES, FOREIGN COMPANIES, LIMITED PARTNERSHIPS AND PARTNERSHIPS, THE MAKING OF BANKRUPTCY ORDERS AGAINST INDIVIDUALS, THE LICENSING AND REGULATION OF INSOLVENCY PRACTITIONERS, THE PENALISATION AND REDRESS OF WRONGDOING ASSOCIATED WITH INSOLVENT PERSONS, THE DISQUALIFICATION OF DIRECTORS, THE AVOIDANCE OF CERTAIN TRANSACTIONS, CROSS BORDER INSOLVENCY ISSUES AND OTHER MATTERS CONNECTED THEREWITH. Commencement [16 August 2004]
PART I
PRELIMINARY PROVISIONS
Short title

This Act may be cited as the Insolvency Act.
Interpretation
(1) In this Act, unless the context otherwise requires—
“administration order” has the meaning specified in section 76; “administrative receiver” has the meaning specified in section 142; “administrator”, in relation to a company, means an administrator appointed under section 79; “arrangement” means a company creditors’ arrangement under Part II, Division 2 or an individual creditors’ arrangement under Part II, Division 3, as the case may be; “articles” means— (a) the articles of association of a company; or (b) where the context permits, in the case of a foreign company the articles of association, by-laws or such other document having the same effect by whatever name called; “asset” includes money, goods, things in action, land and every description of property wherever situated and obligations and every description of

24 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS interest, whether present or future or vested or contingent, arising out of, or incidental to, property; “bankrupt” means an individual against whom a bankruptcy order is made under
Part XII;
“bankruptcy trustee” means the person appointed by the Court to be the trustee of the assets of a bankrupt; “bankrupt’s estate” has the meaning specified in section 313; “board”, in relation to a body corporate, means— (a) the board of directors, committee of management, council or other governing authority of the body corporate; or (b) if the body corporate has only one director, that director; “business day” means any day other than a Saturday, Sunday or public holiday in the Virgin Islands; “charge” includes a mortgage, a fixed charge and a floating charge, whether crystallised or not; “chargee” means the holder of a charge and includes a person in whose favour a charge is to be given or executed under an agreement, whether on demand or otherwise; “chattel leasing agreement” means an agreement for the bailment of goods which is capable of subsisting for more than 3 months; “Civil Procedure Rules” means the Eastern Caribbean Supreme Court Civil Procedure Rules 2000; “Commission” means the Financial Services Commission established under the Financial Services Commission Act; (Amended by Act 12 of 2001) “Companies Act” means the Companies Act, 1885; “company” has the meaning specified in section 3; “connected person”— (a) in relation to a company or a foreign company has the meaning specified in section 5(1); and (b) in relation to an individual has the meaning specified in section 5(3); “Court” means the High Court; “court rate” means the rate of interest specified in section 7 of the Judgments Act; “creditor” and “secured creditor” have the meanings specified in section 9; “creditors’ committee” means a committee appointed under section 421; “director” has the meaning specified in section 6; “disqualification order” has the meaning specified in section 260(1); “disqualification undertaking” has the meaning specified in section 260(2); “document” means a document in any form and includes—

LAW OF VIRGIN ISLANDS Insolvency Act 25 Revision Date: 1 Jan 2020 (a) any writing or printing on any material; (b) any record of information or data, however compiled, and whether stored in paper, electronic, magnetic or any non-paper based form and any storage medium or device, including discs and tapes; (c) books and drawings; and (d) a photograph, film, tape, negative, facsimile or other medium in which one or more visual images are embodied so as to be capable (with or without the aid of equipment) of being reproduced, and without limiting the generality of the foregoing, includes any court application, order and other legal process and any notice; “dollar” or “$” means the lawful currency for the time being of the United States of America; “eligible insolvency practitioner” means an insolvency practitioner who is eligible to act in relation to a company, foreign company or individual in accordance with section 482; “floating charge” means a charge created by a company or a foreign company which is, or as created was, a floating charge; “foreign company” means a body corporate that is incorporated, registered or formed outside the Virgin Islands but excludes a company within the meaning of section 3; “insolvency practitioner” means a person acting in a capacity specified in section 474(1); “insolvent”— (a) in relation to a company or a foreign company, has the meaning specified in section 8(1); and (b) in relation to an individual, has the meaning specified in section 8(2); “Insurance Act” means the Insurance Act; (Amended by Act 1 of 2008) “insurance company” means a company or a foreign company that holds, a licence under the Insurance Act or that at any time has held a licence under the repealed Insurance Act 1994; (Amended by Acts 11 of 2004 and 1 of 2008) “interim supervisor” means the person appointed as the interim supervisor under a proposal for an arrangement; “International Business Companies Act” means the International Business Companies Act, 1984; “liability” has the meaning specified in section 10; “licensed insolvency practitioner” means a person holding a licence to act as an insolvency practitioner issued under section 476; “liquidator”, in relation to a company or a foreign company, means a liquidator appointed under section 159;

26 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS “member”, in relation to a company, includes— (a) a member of a company limited by guarantee; and (b) a person to whom shares in a company have been transferred or transmitted by law, even though that person is not a member of the company within the meaning of the Companies Act; “memorandum” means— (a) the memorandum of association of a company; or (b) where the context permits, in the case of a foreign company its memorandum of association or other constituting document, by whatever name called; “officer”, in relation to a body corporate, includes a director and secretary of that body corporate but does not include an administrator, liquidator, receiver, supervisor or interim supervisor; “Official Receiver” means the Official Receiver appointed by the Commission under section 488; “preferential claim” means a claim of a type prescribed by the Rules as a preferential claim; “preferential creditor” means a creditor having a preferential claim; “prescribed” means prescribed by the Rules or the Regulations made under
section 486 and “prescribed form” means a form specified in the Rules or
those Regulations; (Amended by Act 11 of 2004) “prescribed priority” means— (a) in a liquidation, the priority for the payment of the costs and expenses of a liquidation prescribed in the Rules; and (b) in a bankruptcy, the priority for the payment of the costs and expenses of a bankruptcy prescribed in the Rules; “public document” has the meaning specified in section 13; “receiver” means the receiver of the whole or any part of the assets of a company or a foreign company and includes— (a) a manager and a receiver and manager; (b) a receiver of income; and (c) an administrative receiver; “receiver appointed out of court” means a receiver appointed in the exercise of a power conferred by a debenture or other instrument; “Registrar” means the Registrar of Corporate Affairs appointed under section 229 of the BVI Business Companies Act; (Substituted by Act 16 of 2004) “regulated person” means a person that holds a prescribed financial services licence; “related company” means a company that is related to another company in accordance with section 5(2); “remuneration” includes properly incurred expenses and disbursements;

LAW OF VIRGIN ISLANDS Insolvency Act 27 Revision Date: 1 Jan 2020 “retention of title agreement” means any agreement for the sale of goods under which the seller reserves title in the goods until payment, but excludes an agreement that constitutes a charge on the goods; “Rules” means the Insolvency Rules made under section 498 and, where appropriate, the Rules made under sections 499 and 500; (Amended by Act 11 of 2004) “security interest” includes a charge and a lien; “statement of affairs” means a statement of the affairs of a company or a foreign company complying with section 277 and “verified statement of affairs” means a statement of affairs that has been verified by affidavit; “statement of assets and liabilities” means a statement of the assets and liabilities of an individual complying with section 366 and “verified statement of assets and liabilities” means a statement of assets and liabilities that has been verified by affidavit; “statutory demand” means a demand made under section 155; “subsidiary” and “holding company” have the meanings specified in section 4; “supervisor” means the person appointed to act as the supervisor of an arrangement under Part II; “unlicensed financial services business” has the meaning specified in section 7; and “Virgin Islands court” means any court having jurisdiction in the Virgin Islands. (2) References in this Act or in the Rules to the “venue” for any proceeding, attendance before the Court or for a meeting are to the time, date and place for the proceeding, attendance or meeting. Meaning of “company”
3. Unless this Act expressly provides otherwise, “company” means—
(a) a company incorporated under the Companies Act; (b) an international business company incorporated or continued under the International Business Companies Act; or (Amended by Act 16 of 2004) (c) a company within the meaning specified in section 3(1) of the BVI Business Companies Act. (Amended by Act 16 of 2004) Meaning of “subsidiary” and “holding company”
4. (1) A company is a “subsidiary” of another company, its “holding
company”, if that other company—
(a) holds a majority of the voting rights in it; (b) is a member of it and has the right to appoint or remove a majority of its board; (c) is a member of it and controls alone, pursuant to an agreement with other members, a majority of the voting rights in it, or if it is

28 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS a subsidiary of a company which is itself a subsidiary of that other company. (2) For the purposes of subsection (1), “company” includes a foreign company and any other body corporate. Meaning of “connected person” and “related company”
5. (1) In relation to a company, “connected person” means any one or more
of the following—
(a) a promoter of the company;
(b) a director or member of the company or of a related company; (c) a beneficiary under a trust of which the company is or has been a trustee; (d) a related company; (e) another company one of whose directors is also a director of the company; (f) a nominee, relative, spouse or relative of a spouse of a person referred to in paragraphs (a) to (c); (g) a person in partnership with a person referred to in paragraphs (a) to (c); and (h) a trustee of a trust having as a beneficiary a person who is, apart from this paragraph, a connected person. (2) A company is related to another company if— (a) it is a subsidiary or holding company of that other company; (b) the same person has control of both companies; and (c) the company and that other company are both subsidiaries of the same holding company. (3) In relation to an individual, “connected person” means any one or more of the following— (a) a relative, spouse or relative of a spouse of the individual; (b) a person in partnership with the individual; (c) a relative or spouse of a person in partnership with the individual; (d) a company in respect of which he or she is a connected person under subsection (1); (e) a trustee of a trust having as a beneficiary a person who is, apart from this paragraph, a connected person. (4) For the purposes of this section, “company” includes a foreign company and any other body corporate. Meaning of “director”
6. (1) Subject to subsection (3), “director”, in relation to a body corporate,
includes—

LAW OF VIRGIN ISLANDS Insolvency Act 29 Revision Date: 1 Jan 2020 (a) a person occupying or acting in the position of director by whatever name called; (b) a person in accordance with whose directions or instructions a director or the board of a body corporate may be required or is accustomed to act; and (c) a person who exercises, or is entitled to exercise, or who controls, or is entitled to control, the exercise of powers which, apart from the memorandum or articles, would fall to be exercised by the board. (2) Notwithstanding subsection (1)— (a) a person is not to be regarded as a director of a body corporate by reason only that a director or the board act on advice given by him or her in a professional capacity; and (b) a person acting as an insolvency practitioner in relation to a company or a foreign company is not to be regarded as a director of the company or foreign company by virtue of his or her acting in that capacity. (3) In Parts IX and X, “director” has the meaning specified in this section with the deletion of subsection (1)(c). Meaning of “unlicensed financial services business”
7. A person carries on unlicensed financial services business if he or she
carries on an activity for which a prescribed financial services licence is required without having such a licence authorising him or her to carry on the activity. Meaning of “insolvent”
8. (1) A company or a foreign company is insolvent if—
(a) it fails to comply with the requirements of a statutory demand that has not been set aside under section 157; (b) execution or other process issued on a judgment, decree or order of a Virgin Islands court in favour of a creditor of the company is returned wholly or partly unsatisfied; or (c) either— (i) the value of the company’s liabilities exceeds its assets; or (ii) the company is unable to pay its debts as they fall due. (2) An individual is insolvent if— (a) he or she fails to comply with the requirements of a statutory demand that has not been set aside under section 157; or (b) execution or other process issued on a judgment, decree or order of a Virgin Islands court in favour of a creditor of the individual is returned wholly or partly unsatisfied.

30 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS Meaning of “creditor”, “secured creditor” etc.
9. (1) A person is a creditor of another person (the debtor) if he or she has a
claim against the debtor, whether by assignment or otherwise, that is, or would be, an admissible claim in— (a) the liquidation of the debtor, in the case of a debtor that is a company or a foreign company; or (b) the bankruptcy of the debtor, in the case of a debtor who is an individual. (2) A creditor is a secured creditor of a debtor if he or she has an enforceable security interest over an asset of the debtor in respect of his or her claim. (3) An unsecured creditor is a creditor who is not a secured creditor. Meaning of “liability”
10. (1) For the purposes of this Act, “liability” means a liability to pay money
or money’s worth including a liability under an enactment, a liability in contract, tort or bailment, a liability for a breach of trust and a liability arising out of an obligation to make restitution, and “liability” includes a debt. (2) A liability may be present or future, certain or contingent, fixed or liquidated, sounding only in damages or capable of being ascertained by fixed rules or as a matter of opinion. (3) For the purposes of this Act, an illegal or unenforceable liability is deemed not to be a liability. Admissible claims
11. (1) For the purposes of this section, “relevant time” means the time of the
commencement of the liquidation of a company or a foreign company or the commencement of the bankruptcy of an individual, as the case may be. (2) Subject to section 12, the following liabilities are admissible as claims in the liquidation of a company or foreign company or in the bankruptcy of an individual— (a) liabilities of the company, foreign company or individual at the relevant time; (b) liabilities of the company, foreign company or individual arising after the relevant time by virtue of any obligation incurred before the relevant time; and (c) any interest that may be claimed in accordance with this Act or the Rules. (3) For the purposes of determining whether a liability in tort is an admissible claim in the liquidation of a company or foreign company or in the bankruptcy of an individual, the company, foreign company or individual is deemed to become subject to that liability by reason of an obligation incurred at the time the cause of action accrued.

LAW OF VIRGIN ISLANDS Insolvency Act 31 Revision Date: 1 Jan 2020 Non-admissible claims
12. The following liabilities are not admissible claims in the liquidation of a
company or a foreign company or the bankruptcy of an individual— (a) an obligation arising under a confiscation order made under— (i) the Drug Trafficking Offences Act; or (ii) the Proceeds of Criminal Conduct Act; (b) a liability that, under any enactment or rule of law, is of a type that is not claimable, whether on grounds of public policy or otherwise; and (c) such other liabilities or claims as may be prescribed. (Amended by Act 11 of 2004) Meaning of “public document”
13. (1) Subject to subsection (3), a “public document”, in relation to a person,
means a document of, or purporting to be issued, published or signed by or on behalf of that person that— (a) in the case of a company or foreign company, is required or permitted to be filed with the Registrar under— (i) this Act or the Rules; (ii) the Companies Act; (iii) the International Business Companies Act; or (iv) the BVI Business Companies Act; (Inserted by Act 16 of 2004) (b) is issued, published or signed under, or for the purposes of, this Act or the Rules or any other enactment; or (c) is issued or signed in the course of, or for the purposes of, a particular transaction or dealing. (2) Without limiting subsection (1), “public document” includes a business letter, statement of account, invoice, receipt, order for goods, order for services or an official notice of, or purporting to be issued, published or signed by, or on behalf of, that person. (3) A document is not a public document if it is applied, or intended or required to be applied, to goods or to any container, package or wrapping within which goods are, or are intended to be, supplied for a purpose connected with the supply of those goods.

32 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS
PART II
CREDITORS’ ARRANGEMENTS
Division 1
Interpretation
Interpretation for and scope of this Part
14. (1) In this Part—
“arrangement” has the meaning specified in section 15; “debtor” means a company or individual proposing an arrangement; “nominated insolvency practitioner” means the insolvency practitioner nominated as the interim supervisor under a proposal— (a) by the board of a company; (b) by the administrator or liquidator of a company, where the company is in administration or liquidation; or (c) by an individual debtor; and “proposal” means a proposal for an arrangement. (2) Where the context allows, a reference in this Part— (a) to a proposal includes the proposal as amended; and (b) to the rejection of a proposal includes the deemed rejection of a proposal. Arrangements
15. (1) An arrangement is a compromise between a debtor and its or his or
her creditors, the implementation of which is supervised by a supervisor acting as a trustee or otherwise. (2) Without limiting subsection (1), an arrangement may— (a) cancel all or any part of, or vary, a liability of the debtor; (b) vary the rights of the debtor’s creditors or the terms of a debt; and (c) include any other provision that may be prescribed. (3) Varying a liability or the terms of a debt under subsection (2)(a) or (b) may include— (a) varying, adding or cancelling rights to interest; and (b) varying the dates upon which a liability, or part of a liability, becomes due for payment. (4) An arrangement shall not, except with the written agreement of the secured creditor or the preferential creditor concerned— (a) affect the right of a secured creditor of the debtor to enforce his or her security interest or vary the liability secured by the security interest; or

LAW OF VIRGIN ISLANDS Insolvency Act 33 Revision Date: 1 Jan 2020 (b) result in a preferential creditor receiving less than he or she would receive in a liquidation or bankruptcy of the debtor had it commenced at the time of approval of the arrangement. (5) An arrangement does not effect a release of any surety or co-debtor of the debtor unless the terms of the arrangement expressly provide otherwise. Remuneration of supervisor and interim supervisor
16. A supervisor and an interim supervisor is entitled to be paid remuneration
for his or her services consisting of—
(a) any disbursements made by the interim supervisor prior to the approval of the arrangement, and any remuneration for his or her services as such agreed between himself or herself and— (i) in the case of a company, the board or, where it is in liquidation, the administrator or liquidator; or (ii) in the case of an individual, the debtor; and (b) any fees, costs, charges or expenses which— (i) are sanctioned by the terms of the arrangement; or (ii) would be payable, or correspond to those which would be payable, in an administration or liquidation (in the case of a company) or in a bankruptcy (in the case of an individual). Fixing of remuneration by Court
17. (1) Notwithstanding the terms of the arrangement, on the application of a
person referred to in subsection (4), the Court may review and fix the amount paid or to be paid by way of remuneration to a supervisor or an interim supervisor. (2) Subject to subsection (3), the Court’s power under subsection (1)— (a) extends to fixing the remuneration for any period before the making of the order or the application for it; (b) is exercisable notwithstanding that the supervisor or interim supervisor has died or ceased to act before the making of the application or the order; and (c) extends to requiring the supervisor or interim supervisor or his or her personal representative to account for the excess or such part of it as may be specified in the order to the extent that an amount paid to or retained by the supervisor or interim supervisor as remuneration exceeds that fixed by the Court for the period concerned. (Amended by Act 11 of 2004) (3) The power conferred by subsection (2)(c) may not be exercised with respect to a period before the date of the application for an order under this
section unless the Court is satisfied that there are special circumstances that
justify it.
(4) Application to the Court for an order under subsection (1) may be made by any of the following persons—

34 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (a) the supervisor or interim supervisor; or (b) the company or— (i) if the company is in liquidation, its liquidator; or (ii) if the company is in administration, its administrator. (Amended by Act 11 of 2004) (5) In fixing the remuneration of a supervisor or interim supervisor under this section, the Court shall apply the general principles specified in section 432. Commission’s rights in respect of a regulated person
18. Where a proposal is made, or an arrangement approved, in respect of a
regulated person—
(a) every notice or other document required to be sent to a creditor of the debtor under this Part shall also be sent to the Commission; and (b) unless the applicant is the Commission, notice shall be given to the Commission of any application to the Court under this Part. Division 2 Company Creditors’ Arrangement Interpretation and scope of Division
19. (1) In this Division, “proposal period” means the period from the
appointment of the interim supervisor to the approval or rejection by the creditors of the proposed arrangement. (2) A foreign company may not propose or enter into an arrangement under this Division. Proposal and Interim Supervisor Proposal for an arrangement by board
20. (1) The board of a company, other than a company that is in liquidation
or in administration, may propose an arrangement and nominate an interim supervisor to act in relation to the proposed arrangement if— (a) it believes on reasonable grounds that the company is insolvent or is likely to become insolvent; and (b) it has passed a resolution— (i) stating its belief that the company is insolvent or is likely to become insolvent; (ii) approving a written proposal containing the information prescribed; and (iii) nominating an eligible insolvency practitioner to be appointed as interim supervisor.

LAW OF VIRGIN ISLANDS Insolvency Act 35 Revision Date: 1 Jan 2020 (2) A director who votes in favour of a resolution under subsection (1) without having reasonable grounds for believing that the company is insolvent or is likely to become insolvent commits an offence. Appointment of interim supervisor by board
21. (1) Where the board of a company has passed a resolution under section
20(1)(b), it shall provide the nominated insolvency practitioner with— (a) a copy of the resolution passed; (b) a copy of the proposal approved by the board; (c) a statement of affairs made up to a date no earlier than 2 weeks prior to the date of the resolution; and (d) a notice of intention to appoint the nominated insolvency practitioner as interim supervisor. (2) The nominated insolvency practitioner may accept appointment as interim supervisor by delivering a copy of the notice referred to in subsection (1)(d), endorsed in accordance with the Rules, to the board within 5 business days of the date when the resolution was passed under section 20(1)(b). (3) Subject to subsection (4), the appointment of an interim supervisor takes effect from the time when he or she delivers the endorsed notice to the board. (4) A resolution passed under section 20(1)(b) lapses and is of no effect if the insolvency practitioner nominated in the resolution is not appointed in accordance with this section within 5 business days of the date when the resolution was passed. Appointment of interim supervisor, company in administration or liquidation
22. (1) Where a company is in administration or liquidation, the administrator
or liquidator may make a proposal and appoint another eligible insolvency practitioner as the interim supervisor. (2) Where the administrator or liquidator intends to appoint another eligible insolvency practitioner as interim supervisor, he or she shall provide him or her with— (a) a notice of intention to appoint him or her as interim supervisor; and (b) a written proposal containing the information prescribed. (3) The nominated insolvency practitioner may accept appointment as interim supervisor by delivering the notice referred to in subsection (2)(a), endorsed in accordance with the Rules, to the administrator or liquidator. (4) The appointment of an interim supervisor under this section takes effect from the time when the endorsed notice of intention to appoint is received by the administrator or liquidator.

36 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS Administrator or liquidator acting as interim supervisor
23. (1) An administrator or liquidator who intends to make a proposal may,
instead of appointing another eligible insolvency practitioner as interim supervisor, act as the interim supervisor himself or herself. (2) Where the administrator or liquidator intends to act as the interim supervisor himself or herself he or she shall— (a) prepare a written proposal containing the information prescribed; and (b) sign a notice of intention to act as interim supervisor. (3) The appointment of the administrator or liquidator as interim supervisor under this section takes effect on the date of the notice of intention to act as interim supervisor. Notification of appointment of interim supervisor
24. (1) The interim supervisor shall, within 2 business days of his or her
appointment—
(a) file a notice of appointment as interim supervisor with the Registrar; and (b) if the company is a regulated person, file a copy of the notice of his or her appointment with the Commission. (2) An interim supervisor who contravenes subsection (1) commits an offence. Functions of interim supervisor and power to obtain information
25. (1) The functions of an interim supervisor are—
(a) to prepare a report on the proposal for the creditors; (b) to carry out any duties assigned to him or her by this Act or the Rules; (c) in the case of an interim supervisor appointed by the board or by the administrator or liquidator of a company, to undertake such functions and duties as he or she may agree to undertake with the board or with the administrator or liquidator; and (d) in the case of an interim supervisor appointed by the board of a company, to monitor the affairs of the company, including the conduct of its business, during the proposal period. (2) Where an interim supervisor is appointed by the board or by the administrator or liquidator of a company, every officer of the company or the administrator or liquidator of the company, as the case may be, shall— (a) provide to the interim supervisor such documents, information and explanations as he or she may reasonably require for the purposes of enabling him or her to exercise his or her functions; and

LAW OF VIRGIN ISLANDS Insolvency Act 37 Revision Date: 1 Jan 2020 (b) give the interim supervisor such assistance as he or she may reasonably require. (3) On the application of the interim supervisor, the Court may make an order requiring an officer of the company to comply with subsection (2). (4) An officer of a company who fails to comply with an order of the Court made under subsection (3) commits an offence. Amendment of proposal before creditors’ meeting
26. (1) The board of a company or, in the case of a company that is in
administration or liquidation, its administrator or liquidator, may amend or withdraw a proposal in accordance with the Rules— (a) before the appointment of an interim supervisor; (b) after the appointment of an interim supervisor but before notice of a creditors’ meeting has been given under section 27; or (c) after notice of a creditor’s meeting has been given under section 27 but before the date fixed for the meeting. (2) The Board of a company may not amend or withdraw a proposal unless it has passed a resolution to do so. (3) A proposal cannot be amended or withdrawn otherwise than in accordance with this section or section 31. (Amended by Act 11 of 2004) Meeting of Creditors Calling creditors’ meeting
27. (1) The interim supervisor shall—
(a) prepare a written report on the proposal complying with the Rules; (b) call a meeting of creditors for a date no later than 28 days after the commencement of the proposal period for the purposes of considering whether to approve the proposal; (c) send to each creditor, together with the notice of the meeting, a copy of the proposal, his or her report on the proposal and a copy of the company’s statement of affairs; (d) cause the creditors’ meeting to be advertised; (e) send a copy of the notice of the creditors’ meeting, together with copies of the documents sent to creditors, to every member of the company; and (f) send to every director of the company a copy of the notice of the meeting, together with copies of the documents sent to creditors. (2) Where a proposal is amended under section 26(1)(b), this section and
section 28 applies to the amended proposal as if it were the original proposal.

38 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (3) An interim supervisor who contravenes subsection (1) commits an offence. Interim supervisor may require certain persons to attend creditors’ meeting
28. (1) If the interim supervisor considers that it is reasonable to require the
presence at a creditors’ meeting called under section 27 of a person specified in subsection (4), the interim supervisor may, by notice, require the person to attend the meeting. (2) In determining whether it is reasonable to require a person to attend the creditors’ meeting, the matters that the interim supervisor shall have regard to include— (a) the likely benefits of the person’s attendance; (b) the travel and associated expenses that will be incurred by him or her in attending the meeting, unless the interim supervisor is prepared to pay those expenses; (c) the distance that he or she would be required to travel to attend the meeting; and (d) the time that it would take him or her to travel to and from and attend the meeting. (3) A notice under subsection (1) requiring a person to attend a creditors’ meeting shall be sent to that person at least 14 days prior to the date of the meeting and shall be accompanied by copies of the documents required to be sent to creditors under section 27(1)(c). (4) Subsection (1) applies to an officer of the company and to any person who, at any time during the 2 years prior to the date of the notice, was an officer of the company. (5) A person commits an offence if— (a) he or she receives a notice to attend a creditors’ meeting under subsection (1); and (b) without reasonable excuse, he or she fails to attend the meeting. Attendance of members and directors at creditors’ meeting
29. (1) Subject to subsection (2), each member and director of a company is
entitled to attend the creditors’ meeting and, with the permission of the chairman, to address the meeting, but not to vote in that capacity at the meeting. (2) The chairman of the creditors’ meeting may, if he or she thinks fit, exclude any present or former director or other officer from attendance at the meeting, either completely or for any part of it. (3) Subsection (2) applies whether or not the present or former director or other officer— (a) is also a member; or (b) has been sent a notice requiring him or her to attend the meeting.

LAW OF VIRGIN ISLANDS Insolvency Act 39 Revision Date: 1 Jan 2020 Business to be conducted at creditors’ meeting
30. (1) At the meeting called under section 27, the creditors may resolve—
(a) to approve the proposal, with or without amendment, and appoint the interim supervisor, or another eligible insolvency practitioner, to be the supervisor of the arrangement; (b) to adjourn the meeting to a date no later than 3 months after the commencement of the proposal period; or (c) to reject the proposal. (2) A resolution to approve a proposal is invalid and of no effect if— (a) the proposal does not comply with section 15(4); (b) the proposal has been amended without the consent of the board or, in the case of a company in administration or liquidation, its administrator or liquidator; or (c) the proposal has been amended otherwise than in accordance with
section 26 or section 31.
(3) The proposal is deemed to be rejected, and the creditors’ meeting concluded, if— (a) the creditors fail to pass one of the resolutions specified in subsection (1); or (b) the creditors’ meeting is not held on the date for which it was called or to which it was adjourned. (4) On the rejection of a proposal the proposal period ends and the appointment of the interim supervisor is terminated. (5) References in this section to a meeting include, where the meeting is adjourned, the adjourned meeting. Amendment or withdrawal of proposal at creditors’ meeting
31. (1) Where, at a meeting called under section 27, the creditors wish to
approve an amended proposal that has not been amended in accordance with
section 26, the meeting shall be adjourned for sufficient time to enable the
chairman of the meeting to give all creditors of the company not present or represented at the meeting at least 2 business days’ notice— (a) of the venue of the adjourned meeting; and (b) of the amended proposal to be considered at the adjourned meeting. (2) Where a meeting is adjourned under subsection (1), section 30 applies to the adjourned meeting— (3) Subsection (1) does not apply if— (a) every creditor who was given notice of the meeting under section 27 is present or represented at the meeting; or (b) the chairman certifies in writing that an amendment is to correct minor errors or is otherwise not material.

40 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (4) The board of a company or, in the case of a company that is in administration or liquidation, its administrator or liquidator, may withdraw a proposal at a creditors’ meeting called under section 27 in accordance with the Rules. (Inserted by Act 11 of 2004) Report on outcome of creditors’ meeting
32. (1) The chairman of a creditors’ meeting called under section 27 shall,
within 4 business days of the conclusion of the meeting, prepare a report complying with subsection (2). (2) A report prepared under subsection (1) shall— (a) state whether the proposal was approved or rejected or withdrawn and, if approved, with what modifications, if any; (Amended by Act 11 of 2004) (b) set out the resolutions put to the meeting, and the decision on each one; (c) list the creditors, with their respective values, who were present or represented at the meeting; and (Amended by Act 11 of 2004) (d) (Repealed by Act 11 of 2004) (e) include such further information, if any, that the chairman considers should be made known to creditors. (3) The chairman shall— (a) send a copy of his or her report to every creditor and every member of the company; and (b) file a copy of his or her report with the Registrar. (4) For the purposes of subsection (1), a creditors’ meeting is concluded if— (a) the creditors resolve either to approve or reject the proposal; or (b) the proposal is withdrawn in accordance with section 31(4) or is deemed to be rejected. (Amended by Act 11 of 2004) (5) A person who contravenes subsection (1) or subsection (3) commits an offence. Notification of appointment of supervisor
33. (1) The supervisor shall, within 2 business days of his or her
appointment—
(a) file a notice of appointment as supervisor with the Registrar; and (b) if the company is a regulated person, file a copy of the notice of his or her appointment with the Commission. (2) A supervisor who contravenes subsection (1) commits an offence.

LAW OF VIRGIN ISLANDS Insolvency Act 41 Revision Date: 1 Jan 2020 Effect of approval of proposal
34. (1) Where a proposal is approved at a creditors’ meeting, the arrangement
is binding on the company and on each member and each creditor of the company as if he or she was a party to the arrangement. (2) For the purposes of subsection (1), a person is a creditor of the company— (a) where the company is in administration or liquidation at the time that the proposal is approved, if he or she was a creditor at the commencement of the administration or liquidation, as the case may be; or (b) in any other case, if he or she has a claim against the company that would be an admissible claim in the liquidation of the company commencing at the time of the approval of the arrangement. (Substituted by Act 11 of 2004) Implementation of Arrangement Supervisor to be given possession of assets included in arrangement
35. (1) After the approval of an arrangement the board or, where appropriate
the administrator or liquidator, shall forthwith take all necessary steps to put the supervisor into possession of the assets included in the arrangement. (2) The supervisor shall, on taking possession of the assets included in the arrangement— (a) where, at the time of approval, the company is in administration or liquidation— (i) promptly discharge any sums due to the administrator or liquidator under the Act or the Rules; or (ii) provide the administrator or liquidator with a written undertaking to discharge any such sums out of the assets as soon as practicable; and (b) where, at the time of approval, the company is in liquidation, promptly discharge any sums due to the preferential creditors. (3) The supervisor shall, out of the assets included in the arrangement— (a) discharge all guarantees properly given, or obligations properly entered into, by the administrator or liquidator for the benefit of the company or in the course of his or her duties; (b) pay the administrator’s or the liquidator’s outstanding remuneration; and (c) if as part of the arrangement, the administration order is to be discharged and the administrator released or the liquidation terminated by order of the Court under section 233, pay the costs of such discharge, release or termination. (Amended by Act 11 of 2004)

42 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (4) The following have equally ranking charges on the assets included in the arrangement, subject to the deduction of the proper costs and expenses of realisation— (a) notwithstanding his or her release or discharge, the administrator or liquidator of a company in respect of any monies payable under subsections (2) and (3); and (b) each preferential creditor in respect of any monies payable to him or her under subsection (2). (5) In this section, “liquidator” and “administrator” includes, where appropriate, a former liquidator or administrator. Supervisor’s duty to keep accounting records
36. (1) Where an arrangement permits or requires the supervisor—
(a) to carry on the business of the company or trade on its behalf and in its name; (b) to realise assets of the company; or (c) otherwise to administer or dispose of any of its funds, he or she shall keep accounting records that correctly record and explain the receipts, expenditure and other transactions relating to his or her acts and dealings in and in connection with the arrangement. (2) The supervisor shall retain the accounting records kept under subsection (1) for a period of not less than 6 years after the termination of the arrangement. (3) A supervisor who contravenes this section commits an offence. Supervisor to prepare and send out regular accounts and reports
37. (1) The supervisor shall prepare accounts of his or her receipts and
payments, if any, and reports concerning the progress and efficacy of the arrangement covering the periods specified in subsection (2). (2) The accounts and reports prepared under subsection (1) shall cover— (a) the period of 12 months following the supervisor’s appointment; (b) each subsequent period of 12 months; and (c) where the supervisor ceases to act as supervisor— (i) the period from the end of the period covered by the last accounts required to be prepared under this section, or if he or she acted as supervisor for less than 12 months from the date of his or her appointment, to the date of his or her ceasing to act; and (ii) the period from the date of his or her appointment to the date of his or her ceasing to act, unless prepared in accordance with subsection (2)(c)(i). (3) The supervisor shall, within 60 days of the last day of the period covered by the accounts—

LAW OF VIRGIN ISLANDS Insolvency Act 43 Revision Date: 1 Jan 2020 (a) file a copy of the accounts and his or her report with the Registrar; and (b) send a copy of the accounts and his or her report to— (i) the company; (ii) each creditor of the company who is bound by the arrangement; and (Amended by Act 11 of 2004) (iii) each member of the company. (4) The Court, on the application of the supervisor, may dispense with the sending of the accounts and report prepared under subsection (1) to the members of the company. (5) A supervisor who contravenes this section commits an offence. Completion or premature termination of arrangement
38. (1) Where an arrangement is completed or terminated prematurely, the
supervisor shall, within 28 days of its completion or termination— (a) file a notice of completion or termination with the Registrar; and (b) send a notice of completion or termination to the company and to each creditor of the company who is bound by the arrangement and each member of the company. (Amended by Act 11 of 2004) (2) Where an arrangement is completed or terminated prematurely, the report prepared under section 37(2)(c) shall explain any material difference between the implementation of the arrangement and the proposal approved by the creditors. (Amended by Act 11 of 2004) (3) A supervisor who contravenes this section commits an offence. Modification of Arrangement Supervisor may propose modification of arrangement
39. (1) In this section and in section 40—
(a) “creditor”, in relation to an arrangement, means a creditor bound by that arrangement; and (b) “proposal” means a proposal to modify an arrangement. (2) If the supervisor of an arrangement considers it appropriate, he or she may propose a modification of the arrangement at a meeting of creditors called for such a purpose. (3) The supervisor shall call a meeting of creditors under subsection (2) by sending to each creditor— (a) a notice of the meeting; and (b) a written report on the proposed modification complying with the Rules.

44 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (4) The supervisor shall send a copy of the notice of the meeting and his or her report on the proposed modification to each member and director of the company. Modification of arrangement
40. (1) Unless the Rules otherwise provide, sections 28, 29, 30 and 32 and
the relevant Rules apply, with suitable modifications, to a meeting called under
section 39.
(2) Where a proposal to modify an arrangement is approved— (a) the modified arrangement is binding on the company and on each member and each creditor of the company as if he or she had agreed to the modification; and (b) the provisions of this Division applicable to an arrangement apply to the modified arrangement. (3) An arrangement may not be modified otherwise than in accordance with section 39 and this section. Applications to Court Appointment of interim supervisor or supervisor by Court
41. (1) The Court may, on an application made by a person and in the
circumstances specified in subsection (2), order that an eligible insolvency practitioner, is appointed as supervisor or interim supervisor either in substitution for the existing supervisor or interim supervisor or to fill a vacancy. (2) An application under subsection (1) may be made— (a) where the supervisor or interim supervisor has failed to comply with a duty imposed upon him or her under this Division or has died, by the board of the company, or where it is in administration or liquidation by the administrator or liquidator; (b) where it is impracticable or inappropriate for the existing supervisor or interim supervisor to continue to act, by the board of the company, or where it is in administration or liquidation by the administrator or liquidator, or by the supervisor or interim supervisor; or (c) where the licence of the insolvency practitioner appointed as supervisor or interim supervisor is suspended or revoked, by the Official Receiver. (Inserted by Act 11 of 2004) (3) An order under subsection (1) may increase the number of persons acting as supervisor or interim supervisor or replace one or more of those persons. Application where arrangement approved or modified
42. (1) Where an arrangement is approved or modified, the Court may—
(a) on an application made by a person specified in subsection (2)—

LAW OF VIRGIN ISLANDS Insolvency Act 45 Revision Date: 1 Jan 2020 (i) give directions to the supervisor in relation to any matter arising; (ii) confirm, reverse or modify any act or decision of the supervisor; or (iii) make such other order as it considers fit; or (b) on an application made by the supervisor or, if appropriate the administrator or liquidator— (i) discharge the administration order or terminate the liquidation under section 233; and (Amended by Act 11 of 2004) (ii) give such directions regarding the administration or liquidation as it considers appropriate. (2) Application under subsection (1)(a) may be made by the supervisor, by any administrator or liquidator, by a creditor, director or member of the company, by a surety of a liability of the company, by a co-debtor of the company, by a person affected by the arrangement or, where the company is a regulated person, by the Commission. (3) The Court shall not make an order under subsection (1)(b)— (a) until a period of 28 days after the chairman’s report is filed under
section 32(3); or
(b) at any time when an application under section 43, or an appeal in respect of such an application, is outstanding or during the period within which such an appeal may be brought. (Amended by Act 11 of 2004) Application on grounds of unfair prejudice
43. (1) An application may be made by a person specified in subsection (2)
for an order under subsection (3) on one or both of the following grounds— (a) that an arrangement approved or modified by the creditors unfairly prejudices the interests of a member, creditor, surety or co-debtor of the company; or (b) that there has been a material irregularity at or in relation to the meeting at which the arrangement was approved or modified. (2) An application for an order under subsection (3) may be made by— (a) a member, creditor, surety or co-debtor of the company; (b) the supervisor or the person who, immediately prior to the approval of the arrangement, acted as interim supervisor; (c) where the company is in administration, the administrator; (d) where the company is in liquidation, the liquidator; or (e) where the company is a regulated person, the Commission. (3) Where it is satisfied as to either of the grounds specified in subsection (1), the Court— (a) may revoke or suspend—

46 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (i) any decision approving or modifying the arrangement; or (ii) any decision taken at a meeting at or in relation to which there was a material irregularity; and (b) may give a direction to any person— (i) for the calling of a further meeting to consider any amended proposal for an arrangement that the board or the supervisor may make; (ii) for the calling of a further meeting to consider any amended proposal for a modification of the arrangement that the supervisor may make; or (iii) where there has been a material irregularity, for the calling of a further creditors’ meeting to reconsider the proposal for the arrangement or for the modification of an arrangement. (4) Where at any time after giving a direction under subsection (3)(b)(i) or (ii), the Court is satisfied that the board, or the supervisor, does not intend to submit an amended proposal, the Court shall revoke the direction and revoke or suspend any decision approving the arrangement or the modification of an arrangement. (5) Where the Court, on an application under this section, gives a direction under subsection (3)(b) or revokes or suspends a decision under subsection (3)(a) or (4), the Court may give such supplemental directions as it considers fit and, in particular, directions with respect to things done under the arrangement since it, or any modification, took effect. (6) Except as provided in this section, a decision taken at a meeting called under section 27 or 39 is not invalidated by any irregularity at or in relation to the meeting. (7) Without limiting subsection (1)(a), the interests of a member, creditor, surety or co-debtor of the company are capable of being unfairly prejudiced on the grounds that the remuneration paid or to be paid to the supervisor is excessive. (8) Subject to subsection (9), no application under this section shall be made after the arrangement has been completed or has prematurely terminated. (Inserted by Act 11 of 2004) (9) A creditor who did not participate in the approval of an arrangement may make an application under this section after the completion of an arrangement if, when the arrangement was completed, he or she was unaware of the arrangement. (Inserted by Act 11 of 2004) (10) An application under subsection (9) shall be made within 4 weeks of the creditor first becoming aware of the arrangement. (Inserted by Act 11 of 2004) (11) For the purposes of this section, a creditor does not participate in the approval of an arrangement if, for whatever reason— (a) he or she was not given notice of the meeting of creditors called to consider the proposal; and

LAW OF VIRGIN ISLANDS Insolvency Act 47 Revision Date: 1 Jan 2020 (b) he or she did not attend the meeting at which the arrangement was approved, whether in person or by proxy. (Inserted by Act 11 of 2004) Application to Court by former supervisor or interim supervisor
44. Where an application may be made to the Court by a supervisor or an
interim supervisor under sections 41 , 42 or 43, an application may, with the leave of the Court, be made by the person who was the supervisor or interim supervisor immediately before— (a) the termination of his or her appointment; (b) the termination of the arrangement; or (c) the termination of the proposal period, as the case may be. (Amended by Act 11 of 2004) Offences False representations etc.
45. An officer of a company who makes any false representation or who
fraudulently does, or omits to do, anything for the purpose of obtaining the approval of the creditors of the company to an arrangement commits an offence. Division 3 Individual Creditors’ Arrangement Interpretation for and scope of this Division
46. (1) In this Division—
“debtor” means an individual who intends to make or who has made a proposal under this Division; and “interested person” means— (a) in relation to a security interest, the person entitled to the security interest or any receiver appointed under the security interest; (b) in relation to an asset not belonging to a debtor which is used or occupied by or in the possession of the debtor, the owner or lessor of the asset; (c) in relation to proceedings, execution or legal process, including distress, a person who is entitled to commence or continue the proceedings, execution or legal process or levy the distress; and (d) in relation to a guarantee of a liability of the debtor, the person entitled to enforce the guarantee; “proposal period” means the period from the appointment of the interim supervisor to the approval or rejection by the creditors of the proposed arrangement.

48 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (2) An undischarged bankrupt may not make a proposal under this Division. (3) Where the context allows, a reference in this Division to the extension of a moratorium period includes a further extension of the moratorium period. Proposal Proposal
47. (1) A debtor who intends to make a proposal under this Division shall—
(a) nominate an eligible insolvency practitioner to act as interim supervisor for the purposes of the proposal; and (Amended by Act 11 of 2004) (b) provide the nominated insolvency practitioner with— (i) a copy of the proposal; (ii) a statement of assets and liabilities made up to a date no earlier than 4 weeks prior to the date upon which it is provided to the nominated insolvency practitioner; and (iii) a notice of intention to appoint the nominated insolvency practitioner as interim supervisor. (2) The nominated insolvency practitioner may accept appointment as interim supervisor, by delivering to the debtor a copy of the notice referred to in subsection (1)(b), endorsed in accordance with the Rules. (3) Subject to subsection (4), the appointment of an interim supervisor takes effect from the time when he or she delivers the endorsed notice to the debtor. (4) The appointment of an interim supervisor is not effective unless he or she accepts appointment under subsection (2) within 5 business days of the date of receiving the notice of intention to appoint him or her as interim supervisor from the debtor. Notification of appointment of interim supervisor
48. (1) The interim supervisor shall, within 2 business days of his or her
appointment file a copy of the notice of his or her appointment with the Official Receiver and, if the debtor is a regulated person, with the Commission. (Substituted by Act 11 of 2004) (2) An interim supervisor who contravenes subsection (1) commits an offence. Functions of interim supervisor and power to obtain information
49. (1) The functions of an interim supervisor are—
(a) to prepare a report on the proposal for the Court; (b) to carry out any duties assigned to him or her by this Act or the Rules or by the Court;

LAW OF VIRGIN ISLANDS Insolvency Act 49 Revision Date: 1 Jan 2020 (c) to undertake such functions and duties as he or she may agree with the debtor; and (d) to monitor the affairs of the debtor, including the conduct of any business carried on by the debtor, during the proposal period. (2) For the purposes of enabling the interim supervisor to exercise his or her functions, a debtor shall— (a) provide to the interim supervisor such documents, information and explanations as he or she may reasonably require; and (b) give the interim supervisor such assistance as he or she may reasonably require. (3) On the application of the interim supervisor, the Court may make an order requiring a debtor to comply with subsection (2). (4) A debtor who fails to comply with an order of the Court made under subsection (3) commits an offence. Amendment of proposal after appointment of interim supervisor
50. (1) A debtor may amend or withdraw a proposal in accordance with the
Rules—
(a) before the appointment of an interim supervisor; (b) after the appointment of an interim supervisor but before notice of a creditors’ meeting has been given under section 58; or (c) after notice of a creditors’ meeting has been given under section 58 but before the date fixed for the meeting. (2) A proposal cannot be amended or withdrawn otherwise than in accordance with this section or section 60. (Amended by Act 11 of 2004) Moratorium Application for moratorium order
51. (1) A debtor who intends to make a proposal may apply to the Court for a
moratorium order under this section if— (a) he or she is entitled to apply to the Court for a bankruptcy order under section 295; (b) an eligible insolvency practitioner has accepted appointment as interim supervisor under the proposal in accordance with section 47; (c) no previous application for a moratorium has been made by the debtor during the 12 months immediately preceding the date of the application; and (d) he or she is not a regulated person.

50 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (2) An application under subsection (1) shall be supported by an affidavit setting out the matters prescribed and exhibiting— (a) a copy of the proposal provided to the interim supervisor under
section 47(1)(b);
(b) a copy of the endorsed notice of appointment of the interim supervisor; and (c) a statement of assets and liabilities. (3) The debtor shall give 2 business days notice of the hearing of an application under this section to— (a) the interim supervisor; and (b) any creditor who, to his or her knowledge, has applied to the Court for a bankruptcy order against him or her. Court may grant stay
52. (1) At any time when an application under section 51 for a moratorium
order is pending, the Court may, on the application of the debtor or the interim supervisor, stay any action, execution or other legal process against the debtor or his or her assets. (2) Any Virgin Islands court, or any tribunal in the Virgin Islands, in which proceedings are pending against a debtor may, on proof that an application under section 51 has been made by the debtor, either stay those proceedings or allow them to continue on such terms as it considers just. Moratorium order
53. (1) The Court may make a moratorium order on an application under
section 51 if it considers that it would be appropriate to do so for the purpose of
facilitating the consideration of the debtor’s proposal.
(2) Unless extended by the Court under this section, a moratorium order ceases to have effect at the end of the 14th day after the date upon which it is made. (3) If the Court makes a moratorium order under subsection (1), it shall at the same time fix a venue for consideration of the interim supervisor’s report under section 56, no later than the date of expiry of the moratorium order under subsection (2). (4) In a case where the interim supervisor has failed to submit his or her report as required by section 56, the Court may, on the application of the debtor, direct that the moratorium order shall continue or, if it has ceased to have effect, be renewed for such further period as the Court may order. (5) The Court may, on the application of the interim supervisor, extend the period for which the moratorium order has effect so as to enable the interim supervisor to have more time to prepare and submit his or her report under
section 56.
(6) The Court may, at any time, discharge the moratorium order if it is satisfied, whether by reason of a report made to it by the interim supervisor under section 54 or otherwise—

LAW OF VIRGIN ISLANDS Insolvency Act 51 Revision Date: 1 Jan 2020 (a) that the debtor has failed to comply with his or her obligations under section 49(2); (b) that it would not be appropriate for a meeting of creditors to be called to consider the debtor's proposal; or (c) that, for any other reason, it is appropriate for the moratorium order to be discharged. (7) An order discharging the moratorium order may be made by the Court on the application of the debtor or the interim supervisor or on its own motion. Duty of interim supervisor to report certain matters to the Court
54. The interim supervisor shall report to the Court forthwith if, at any time
during the period when a moratorium order is in force— (a) he or she forms the view that the proposed arrangement no longer has a reasonable prospect of being approved or implemented; or (b) the debtor fails to comply with his or her obligations under
section 49(2).
Effect of moratorium order
55. (1) In the period during which a moratorium order is in force in respect of
a debtor—
(a) no application for a bankruptcy order against the debtor may be presented or proceeded with; (b) no bankruptcy order may be made against the debtor; (c) no steps may be taken to enforce any security interest over the debtor’s assets, except with the leave of the Court; (d) no steps may be taken to repossess assets that are being used or occupied by or are in the possession of the debtor, including— (i) goods supplied under a hire purchase, conditional sale or chattel leasing agreement; and (ii) goods supplied subject to a retention of title agreement, except with the leave of the Court; and (e) no proceedings, execution or other legal process may be commenced or continued or distress levied against the debtor or his or her assets, except with the leave of the Court. (2) On an application for leave under subsection (1)(c) to (e), the Court may grant leave subject to such terms and conditions as it considers fit. (3) Subsection (1) does not prevent or require the leave of the Court to be obtained for— (a) the enforcement of a security interest on assets belonging to a debtor if, before the commencement of the moratorium period, an interested person lawfully— (i) entered into possession or assumed control of the assets; or

52 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (ii) entered into a binding agreement to sell the assets, for the purpose of enforcing the security interest on those assets; (b) the repossession of assets being used or occupied by or in the possession of a debtor if, before the commencement of the moratorium period, an interested person lawfully entered into possession, or assumed control of those assets; or (Amended by Act 11 of 2004) (c) the exercise by a creditor of any set-off that he or she would have been entitled to exercise under section 150 if the debtor was in bankruptcy, the bankruptcy having commenced on the date that the moratorium order was made. Consideration of Proposal Interim supervisor’s report on debtor’s proposal
56. (1) An interim supervisor shall, before the end of the relevant time limit
specified in subsection (3), file with the Court a report including the matters prescribed in the Rules. (2) An interim supervisor shall file with the report— (a) where the debtor made an application for a moratorium order under section 51 and the proposal has since been amended, a copy of the amended proposal; or (b) where the debtor has not made an application for a moratorium order, copies of the documents referred to in section 51(2)(a) to (c). (3) The relevant time limits for the purposes of subsection (1) are— (a) where a moratorium order has been made, no less than 2 business days prior to the date of the hearing fixed under section 53(3); (b) in any other case, within 14 days after the date of the appointment of the interim supervisor. (4) The Court may, on the application of the interim supervisor, extend the period within which the interim supervisor shall submit his or her report under subsection (1) by such further period as it considers appropriate. Extension of moratorium
57. (1) This section applies where a moratorium order is in force at the time
when the interim supervisor files his or her report with the Court. (2) If, on receiving the interim supervisor’s report, the Court is satisfied that a meeting of creditors should be called to consider the debtor’s proposal, the Court shall extend the period for which the moratorium order is in force for such further period as it may specify for the purpose of enabling the debtor’s proposal to be considered by his or her creditors in accordance with this Division and for the result of the creditors’ meeting to be reported to the Court.

LAW OF VIRGIN ISLANDS Insolvency Act 53 Revision Date: 1 Jan 2020 Calling creditors’ meeting
58. (1) Unless the Court otherwise orders, where the interim supervisor has
reported to the Court that a meeting of creditors should be called, he or she shall— (a) call a meeting of creditors at the venue proposed in his or her report; and (b) send to each creditor, together with the notice of the meeting, a copy of the debtor’s proposal, his or her report on the proposal and a copy of the debtor’s statement of assets and liabilities. (2) An interim supervisor who contravenes subsection (1) commits an offence. Decisions of creditors’ meetings
59. (1) At the meeting called under section 58, the creditors may resolve—
(a) to approve the proposal, with or without amendment, and appoint the interim supervisor, or another eligible insolvency practitioner, to be the supervisor of the arrangement; (b) to adjourn the meeting to a date no later than 28 days after the date for which the meeting was originally called; or (c) to reject the proposal. (2) A resolution to approve a proposal is invalid and of no effect if— (a) the proposal does not comply with section 15(4); (b) the proposal has been amended without the consent of the debtor; or (c) the proposal has been amended otherwise than in accordance with
section 50 or section 60.
(3) The proposal is deemed to be rejected, and the creditors’ meeting concluded, if— (a) the creditors fail to pass one of the resolutions specified in subsection (1); or (b) the creditors’ meeting is not held on the date for which it was called or to which it was adjourned. (4) Where a meeting of creditors is adjourned, the chairman shall forthwith file a notice of the adjournment with the Court and the Court may, on the application of the debtor or the interim supervisor, extend the period for which the moratorium order is in force for such further period as it may specify for the purpose of enabling the adjourned meeting to be held and for the result to be reported to the Court. (5) References in this section and section 60 to a meeting include, where the meeting is adjourned, an adjourned meeting.

54 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS Amendment or withdrawal of proposal at creditors’ meeting
60. (1) Where, at a meeting held under section 59, the creditors wish to
approve an amended proposal that has not been amended in accordance with
section 50, the meeting shall be adjourned for sufficient time to enable the
chairman of the meeting to give all creditors not present or represented at the meeting at least 2 business days notice— (a) of the venue of the adjourned meeting; and (b) of the amended proposal to be considered at the adjourned meeting. (2) Where a meeting is adjourned under subsection (1), section 59 applies to the adjourned meeting. (3) Subsection (1) does not apply— (a) if every creditor who was given notice of the meeting under
section 58 is present or represented at the meeting; or (Amended
by Act 11 of 2004)
(b) if the chairman certifies in writing that an amendment is to correct minor errors or is otherwise not material. (4) The debtor may withdraw a proposal at a creditors’ meeting called under section 58 in accordance with the Rules. (Inserted by Act 11 of 2004) Report of decisions to Court
61. (1) The chairman of a creditors’ meeting called under section 58 shall,
within 4 business days of the date of the conclusion of the meeting— (a) file with the Court a report of the meeting complying with subsection (2); (b) file a notice of the arrangement with the Official Receiver; and (c) if the debtor is a regulated person, file notice of the arrangement with the Commission. (2) A report filed under subsection (1)(a) shall— (a) state whether the proposal was approved or rejected or withdrawn and, if approved, with what modifications, if any; (Amended by Act 11 of 2004) (b) set out the resolutions put to the meeting, and the decision on each one; (c) list the creditors, with their respective values, who were present or represented at the meeting; and (d) include such further information, if any, that the chairman considers should be made known to the Court. (3) If a report filed under subsection (1)(a) states that the meeting has rejected the proposal or that it was withdrawn by the debtor under section 60(4), any moratorium order in force is discharged with effect from the end of the fourth business day after the conclusion of the meeting unless the Court otherwise orders. (Amended by Act 11 of 2004)

LAW OF VIRGIN ISLANDS Insolvency Act 55 Revision Date: 1 Jan 2020 (4) The chairman of the meeting shall, as soon as practicable after filing his or her report with the Court, send a notice stating the result of the meeting to all creditors of the debtor. (5) A person who contravenes subsection (1) or subsection (4) commits an offence. Effect of approval
62. (1) Where the meeting of creditors called under section 58 approves the
proposed arrangement, the arrangement—
(a) takes effect as if made by the debtor at the meeting; and (b) is binding on the debtor and each creditor of the debtor as if he or she were a party to the arrangement. (2) For the purposes of subsection (1), a person is a creditor of the debtor if he or she has a claim against the debtor that would be an admissible claim in the bankruptcy of the debtor commencing at the time of the approval of the arrangement. (3) If— (a) when the arrangement ceases to have effect any amount payable under the arrangement to a person bound by the arrangement has not been paid; and (b) the arrangement did not come to an end prematurely, the debtor shall, at that time, become liable to pay to that person the amount payable under the arrangement. (4) For the purposes of subsection (3), an arrangement comes to an end prematurely if, when it ceases to have effect, it has not been fully implemented in respect of all persons bound by the arrangement. (5) Subject to section 72, any moratorium order in force in relation to the debtor immediately before the end of the period of 28 days beginning with the day on which the report with respect to the creditors’ meeting was filed with the Court under section 61 ceases to have effect at the end of that period. (6) Where proceedings on an application for a bankruptcy order have been stayed by a moratorium order which ceases to have effect under subsection (5), that application is deemed, unless the Court otherwise orders, to have been dismissed. (Amended by Act 11 of 2004) Implementation of Arrangement Supervisor to be given possession of assets included in arrangement
63. After the approval of an arrangement the debtor shall forthwith take all
necessary steps to put the supervisor into possession of the assets included in the arrangement. Supervisor’s duty to keep accounting records
64. (1) Where an arrangement permits or requires the supervisor—

56 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (a) to carry on the debtor’s business or trade on his or her behalf or in his or her name; (b) to realise assets of the debtor; or (c) otherwise to administer or dispose of any of the debtor’s funds, he or she shall keep accounting records that correctly record and explain the receipts, expenditure and other transactions relating to his or her acts and dealings in and in connection with the arrangement. (2) The supervisor shall retain the accounting records kept under subsection (1) for a period of not less than 6 years after the termination of the arrangement. (3) A supervisor who contravenes this section commits an offence. Supervisor to prepare and send out regular accounts and reports
65. (1) The supervisor shall prepare accounts of his or her receipts and
payments, if any, and reports concerning the progress and efficacy of the arrangement covering the periods specified in subsection (2). (2) The accounts and reports prepared under subsection (1) shall cover— (a) the period of 12 months following the supervisor’s appointment; (b) each subsequent period of 12 months; and (c) where the supervisor ceases to act as supervisor— (i) the period from the end of the period covered by the last accounts required to be prepared under this section, or if he or she acted as supervisor for less than 12 months from the date of his or her appointment, to the date of his or her ceasing to act; and (ii) the period from the date of his or her appointment to the date of his or her ceasing to act, unless prepared in accordance with subparagraph (i). (3) The supervisor shall, within 60 days of the last day of the period covered by the accounts— (a) file a copy of the accounts and his or her report with the Court; and (b) send a copy of the accounts and his or her report to— (i) the Official Receiver; (Amended by Act 11 of 2004) (ii) the debtor; and (iii) each creditor of the debtor who is bound by the arrangement. (Amended by Act 11 of 2004) (4) A supervisor who contravenes this section commits an offence. Completion or premature termination of arrangement
66. (1) Where an arrangement is completed or terminated prematurely, the
supervisor shall, within 28 days of its completion or termination, file a notice of

LAW OF VIRGIN ISLANDS Insolvency Act 57 Revision Date: 1 Jan 2020 completion or termination with the Court and send a copy of the notice to the debtor and to each creditor of the debtor who is bound by the arrangement. (Amended by Act 11 of 2004) (2) Where an arrangement is completed or terminated, the report prepared under section 65(2)(c) shall explain any difference between the implementation of the agreement and the proposal approved by the creditors. (Amended by Act 11 of 2004) (3) A supervisor who contravenes this section commits an offence. Modification of Arrangement Supervisor may propose modification of arrangement
67. (1) In this section and in section 68—
(a) “creditor”, in relation to an arrangement, means a creditor bound by that arrangement; and (b) “proposal” means a proposal to modify an arrangement. (2) If the supervisor of an arrangement considers it appropriate, he or she may propose a modification of the arrangement at a meeting of creditors called for such a purpose. (3) The supervisor shall call a meeting of creditors under subsection (2) by sending to each creditor— (a) a notice of the meeting; and (b) a written report on the proposed modification complying with the Rules. (Amended by Act 11 of 2004) (4) The supervisor shall send a copy of the notice of the meeting and his or her report on the proposed modification to the debtor. Modification of arrangement
68. (1) Subject to the exceptions specified in the Rules, sections 59 and 61
and the relevant Rules apply, with suitable modifications, to a meeting called under section 67. (2) Where a proposal to modify an arrangement is approved— (a) the modified arrangement is binding on the debtor and on each creditor of the debtor as if he or she had agreed to the modification; and (b) the provisions of this Division applicable to an arrangement apply to the modified arrangement. (3) An arrangement may not be modified otherwise than in accordance with section 67 and this section.

58 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS Applications to Court Appointment of interim supervisor or supervisor
69. (1) The Court may, on an application made by a person and in the
circumstances specified in subsection (2), order that an eligible insolvency practitioner, is appointed as supervisor or interim supervisor either in substitution for the existing supervisor or interim supervisor or to fill a vacancy. (Amended by Act 11 of 2004) (2) An application under subsection (1) may be made— (a) where the interim supervisor has failed to submit the report required by section 56, on the application of the debtor; (b) where the supervisor or interim supervisor has failed to comply with a duty imposed upon him or her under this Division or has died, by the debtor; (c) where it is impracticable or inappropriate for the existing supervisor or interim supervisor to continue to act, by the debtor or by the supervisor or interim supervisor; or (d) where the licence of the supervisor or interim supervisor is suspended or revoked, by the Official Receiver. (Substituted by Act 11 of 2004) (3) An order under subsection (1) may increase the number of persons acting as supervisor or interim supervisor or replace one or more of those persons. Application in respect of moratorium
70. (1) Where a moratorium order is or has been in force in respect of a
debtor, the Court may, on an application made by the debtor, by the supervisor or interim supervisor, by a creditor, by a person affected by the moratorium or, where the individual is a regulated person, by the Commission— (a) give directions to the supervisor or interim supervisor in relation to any matter arising in connection with the moratorium; (b) confirm, reverse or modify any act or decision of the supervisor or interim supervisor; (c) terminate the moratorium order and make such consequential provisions as it considers fit; or (d) make such other order, whether in relation to the supervisor or interim supervisor, the debtor or otherwise as it considers fit. (2) Without limiting subsection (1)(d), an order under that subsection— (a) may require the debtor to refrain from doing or continuing an act complained of by the applicant, or to do an act that the applicant has complained he or she has omitted to do; (b) may require the calling of a meeting of creditors for the purpose of considering such matters as the Court may direct; and

LAW OF VIRGIN ISLANDS Insolvency Act 59 Revision Date: 1 Jan 2020 (c) may make such provision as the Court considers necessary to protect the interests of one or more creditors in the period during which the moratorium order is in force. (3) An application under subsection (1) may be made during the period in which the moratorium order is in force or after the moratorium order has been discharged. (4) In making an order under this section, the Court shall have regard to the need to safeguard the interests of persons who have dealt with the debtor in good faith and for value. Application where arrangement approved or modified
71. (1) Where an arrangement is approved or modified, the Court may, on an
application made by a person specified in subsection (2)— (a) give directions to the supervisor in relation to any matter arising in connection with the arrangement; (b) confirm, reverse or modify any act or decision of the supervisor; or (c) make such other order as it considers fit. (2) Application under subsection (1) may be made by the supervisor, by the debtor, by a creditor of the debtor, by a surety of a liability of the debtor, by a co-debtor of the debtor, by a person affected by the arrangement or, where the individual is a regulated person, by the Commission. Application on grounds of unfair prejudice
72. (1) An application may be made by a person specified in subsection (2)
for an order under subsection (3) on one or both of the following grounds— (a) that an arrangement approved or modified by the creditors at a meeting called under section 58 unfairly prejudices the interests of a creditor, surety or co-debtor; or (b) that there has been a material irregularity at or in relation to the meeting at which the arrangement was approved or modified. (2) An application for an order under subsection (1) may be made by— (a) the debtor; (b) the supervisor or the person who, immediately prior to the approval of the arrangement, acted as interim supervisor; (c) a creditor, surety or co-debtor of the debtor; or (d) where the individual is a regulated person, the Commission. (Amended by Act 11 of 2004) (3) Where it is satisfied as to either of the grounds specified in subsection (1), the Court may— (a) revoke or suspend— (i) any decision approving or modifying the arrangement; or

60 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (ii) any decision taken at a meeting at or in relation to which there was a material irregularity; (b) give a direction to any person— (i) for the calling of a further meeting to consider any amended proposal for an arrangement that the supervisor or the debtor may make; (ii) for the calling of a further meeting to consider any amended proposal for a modification of the arrangement that the supervisor may make; (iii) where there has been a material irregularity, for the calling of a further creditors’ meeting to reconsider the proposal for the arrangement or for the modification of an arrangement. (4) Where at any time after giving a direction under subsection (3)(b)(i), the Court is satisfied that the debtor does not intend to submit an amended proposal, the Court shall revoke the direction and revoke or suspend any decision approving the arrangement or the modification of the arrangement. (5) Where the Court, on an application under this section gives a direction under subsection (3)(b) or revokes or suspends a decision under subsection (4), the Court may— (a) direct that any moratorium order in place be continued or, if it has ceased to have effect, be renewed for such further period as the Court may order; and (b) give such supplemental directions as it considers fit and, in particular, directions with respect to things done under the arrangement since it took effect. (6) Except as provided in this section, a decision taken at a meeting called under section 58 or section 67 is not invalidated by any irregularity at or in relation to the meeting. (Amended by Act 11 of 2004) (7) Without limiting subsection (1)(a), the interests of a member, creditor, surety or co-debtor of the debtor are capable of being unfairly prejudiced on the grounds that the remuneration paid or to be paid to the supervisor is excessive. (Amended by Act 11 of 2004) (8) Subject to subsection (9), no application under this section shall be made after the arrangement has been completed or has prematurely terminated. (Inserted by Act 11 of 2004) (9) A creditor who did not participate in the approval of an arrangement may make an application under this section after the completion of an arrangement if, when the arrangement was completed, he or she was unaware of the arrangement. (Inserted by Act 11 of 2004) (10) An application under subsection (9) shall be made within 4 weeks of the creditor first becoming aware of the arrangement. (Inserted by Act 11 of 2004) (11) For the purposes of this section, a creditor does not participate in the approval of an arrangement if, for whatever reason— (a) he or she was not given notice of the meeting of creditors called to consider the proposal; and

LAW OF VIRGIN ISLANDS Insolvency Act 61 Revision Date: 1 Jan 2020 (b) he or she did not attend the meeting at which the arrangement was approved, whether in person or by proxy. (Inserted by Act 11 of 2004) Miscellaneous Register of arrangements
73. (1) The Official Receiver shall maintain a register of arrangements made
under this Division and shall record in the register all matters that are required to be reported to him or her under this Division or under the corresponding Division in the Rules. (2) A member of the public is entitled to inspect the register maintained under subsection (1) on payment of the prescribed fee. Offences False representations etc.
74. (1) A debtor who makes any false representation or who fraudulently
does, or omits to do, anything for the purpose of obtaining the approval of his or her creditors to an arrangement commits an offence. (2) Subsection (1) applies whether or not the proposal is approved.
PART III
ADMINISTRATION
Preliminary
Interpretation for and scope of this Part
75. (1) In this Part—
“interested person” means—
(a) in relation to a security interest, the person entitled to the security interest or any receiver appointed under the security interest; (b) in relation to an asset not belonging to a company which is used or occupied by or in the possession of the company, the owner or lessor of the asset; (c) in relation to proceedings, execution or legal process, including distress, a person who is entitled to commence or continue the proceedings, execution or legal process or levy the distress; and (d) in relation to a guarantee of a liability of the company, the person entitled to enforce the guarantee; “moratorium period” is the period specified in section 83(1).

62 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (2) An administration order may not be made in respect of a foreign company. Administration Orders Meaning of administration order
76. (1) An administration order is an order directing that, during the period
for which the order is in force, the business, assets and affairs of a company shall be managed by an administrator appointed by the Court with a view to achieving one or more of the following purposes— (a) the rehabilitation of the company or of one or more companies in a group of companies of which the company is a member; (b) the survival of all or any part of the company’s undertaking as a going concern; (c) a better return for the company’s creditors than would result from an immediate liquidation; (d) the approval of a creditors’ arrangement under Part II; (e) to facilitate an application, or the provision of cooperation, under
Part XVIII or Part XIX.
(2) Where an administration order is made in respect of a company, that company is referred to in this Act as “in administration” until the discharge of the order. (3) For the purposes of subsection (1)(a) a “group of companies” comprises a holding company and its subsidiaries. (4) In subsection (3), “company” means any body corporate. Court may make an administration order
77. (1) Subject to subsections (3) and (4), section 78(2) and section 79(2), the
Court may, on application by a person specified in subsection (2), make an administration order in respect of a company if— (a) it is satisfied that the company is or is likely to become insolvent; and (b) it considers that there is a reasonable prospect that the making of the order will achieve one or more of the purposes specified in
section 76(1).
(2) Application for an administration order may be made by one or more of the following— (a) the company, or the board of the company; (Amended by Act 11 of 2004) (b) a creditor; (c) the supervisor of an arrangement in respect of the company; and (d) the Commission, where the company—

LAW OF VIRGIN ISLANDS Insolvency Act 63 Revision Date: 1 Jan 2020 (i) is or has been a regulated person; or (ii) is carrying on, or has carried on, unlicensed financial services business. (3) An application for an administration order shall be served not less than 7 business days prior to the date fixed for the hearing— (a) on any person who has appointed or is or may be entitled to appoint an administrative receiver for the company; (b) if an administrative receiver has been appointed, on him or her; (c) if the application is made by any person other than the company, on the company; (d) if an application has been made for the appointment of a liquidator of the company, on the applicant and on any provisional liquidator of the company; (e) (Repealed by Act 11 of 2004) (f) (Repealed by Act 11 of 2004) (g) on the Commission if— (i) the company is or has been a regulated person; and (ii) the applicant is not the Commission; and (Amended by Act 11 of 2004) (h) on any other person prescribed by the Rules. (Inserted by Act 11 of 2004) (4) Without limiting section 496(2)(b), an administration order shall not be made unless service of the application has been effected on the persons specified in subsection (3)(a) to (g). (Amended by Act 11 of 2004) (4A) The Court shall not abridge the time period specified in subsection (3) in respect of a person specified in subsection (3)(a) without that person’s consent. (Inserted by Act 11 of 2004) (5) An application for an administration order may not be withdrawn except with the leave of the Court. Application in respect of insurance companies
78. (1) Where an application for an administration order is made by the
Commission in respect of an insurance company, for the purposes of section 77(1)(a), the insurance company is deemed to be insolvent if the total value of its assets does not exceed the total amount of its liabilities by at least the minimum margin of solvency required under the Insurance Act. (Amended by Act 1 of 2008). (2) An application for an administration order may not be made in respect of an insurance company unless the Commission has consented in writing.

64 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS Powers of Court on hearing of application for administration order
79. (1) Subject to subsection (2), on the hearing of an application for an
administration order, the Court may—
(a) make an administration order in respect of the company; (b) dismiss the application; (c) adjourn the hearing conditionally or unconditionally; (d) make any interim order or other order that it considers fit; or (e) treat the application as an application for the appointment of a liquidator and make any order that it could make under section 167. (2) Subject to section 80, an application for an administration order shall be dismissed if— (a) the company is in liquidation; (b) the Court is satisfied that a qualifying administrative receiver has been appointed for the company who, in accordance with section 142(2) is entitled to act, unless the Court is also satisfied— (i) that the person by whom or on whose behalf the administrative receiver was appointed consents to the making of an order; or (ii) that any security interest under which the administrative receiver was appointed would, if an administration order was made, be liable to be set aside as a voidable transaction under
Part VIII; or
(c) in the case of an insurance company, the Commission has not consented in writing to the application being made. (3) For the purposes of subsection (2), an administrative receiver is a qualifying administrative receiver if— (a) he or she is a licensed insolvency practitioner, whether or not he or she has been appointed to act jointly with an overseas insolvency practitioner, within the meaning of section 473; and (b) notice of his or her appointment has been filed with the Registrar under section 118(1) no later than the day before the date of the hearing of the application. (Substituted by Act 11 of 2004) (4) Where the Court makes an administration order it shall, at the same time, appoint an eligible insolvency practitioner to be the administrator of the company. (5) If the Court makes an order under subsection (1)(c), it shall give directions as to the persons to whom, and how, notice is to be given. Application where company in liquidation
80. (1) The liquidator of a company may apply to the Court for an
administration order.

LAW OF VIRGIN ISLANDS Insolvency Act 65 Revision Date: 1 Jan 2020 (2) If the Court makes an administration order on the application of the liquidator of a company— (a) the Court— (i) shall discharge the order appointing the liquidator; (ii) shall make provision for such matters as may be prescribed; (iii) may make such consequential provision as it considers appropriate; and (iv) shall specify which of the powers of an administrator are to be exercisable by the administrator; and (b) this Part has effect with such modifications as the Court may specify. Effect of administration order
81. Where the Court makes an administration order—
(a) any application for the appointment of a liquidator shall be dismissed; and (b) any administrative receiver of the company is deemed to have vacated office. Notification and advertisement of administration order
82. (1) Where an administration order is made, the administrator shall—
(a) forthwith, after the making of the order, give notice of his or her appointment to— (i) any person who has appointed, or who is or may be entitled to appoint, an administrative receiver of the company; (ii) any administrative receiver who has been appointed; (iii) if an application for the appointment of a liquidator is pending, to the applicant and to any provisional liquidator that may have been appointed; and (iv) such other person as may be prescribed by the Rules; (Inserted by Act 11 of 2004) (b) within 5 days of the making of the order— (i) advertise the order and his or her appointment as administrator; and (ii) file a notice of his or her appointment together with a sealed copy of the order with the Registrar and, if the company in administration is or has been a regulated person, with the Commission; and (c) within 28 days of the order, send a notice in the prescribed form to the company and to every creditor of the company. (2) An administrator who, without reasonable excuse, fails to comply with subsection (1) commits an offence.

66 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS Moratorium Moratorium period
83. (1) Subject to subsection (2), a moratorium period in respect of a
company commences on the filing of an application for an administration order and terminates on— (a) the dismissal of the application for an administration order; or (b) if an administration order is made, upon the discharge of that order. (2) If an application for an administration order is filed at a time when an administrative receiver of the company is in office and the person by or on whose behalf the administrative receiver was appointed has not consented to the making of an order, the moratorium period does not commence unless and until— (a) that person so consents in writing; (b) the administrative receiver vacates or is deemed to vacate office; or (c) an administration order is made. Effect of moratorium
84. (1) Subject to subsections (3), (4) and (5), during the moratorium
period—
(a) no order may be made and, notwithstanding paragraph (f), no resolution may be passed for the appointment of a liquidator or a provisional liquidator; (b) no steps may be taken to enforce any security interest over the company’s assets, except with the leave of the Court or, if the company is in administration, with the consent of the administrator; (c) except with the leave of the Court or, if the company is in administration, with the consent of the administrator, no steps may be taken to repossess assets that are being used or occupied by or are in the possession of the company, including— (i) goods supplied under a hire purchase, conditional sale or chattel leasing agreement; and (ii) goods supplied subject to a retention of title agreement; (d) no proceedings, execution or other legal process may be commenced or continued or distress levied against the company or its assets except with the leave of the Court or, if the company is in administration, with the consent of the administrator; (e) no share may be transferred and no alteration may be made in the status of the members of the company, whether by an amendment of the memorandum or articles or in any shareholders’ or

LAW OF VIRGIN ISLANDS Insolvency Act 67 Revision Date: 1 Jan 2020 members’ agreement or otherwise, except with the leave of the Court; and (f) no resolution of the members may be passed except with the leave of the Court or, if the company is in administration, with the consent of the administrator. (2) On an application for leave under subsection (1) (b) to (f), the Court may grant leave subject to such terms and conditions as it considers fit. (3) During the period beginning with the commencement of the moratorium period and ending with the making of an administration order, subsection (1) does not prevent the appointment of an administrative receiver of the company, or require the leave of the Court for the appointment of an administrative receiver or limit or affect the carrying out by an administrative receiver of his or her functions. (4) Subsection (1) does not prevent, or require the leave of the Court to be obtained for— (a) the enforcement of a charge on assets belonging to a company if, before the commencement of the moratorium period, an interested person lawfully— (i) entered into possession or assumed control of the assets; or (ii) entered into a binding agreement to sell the assets, for the purpose of enforcing the charge on those assets; (b) the repossession of assets being used or occupied by or in the possession of a company if, before the commencement of the moratorium period, an interested person lawfully entered into possession, or assumed control of those assets; (Amended by Act 11 of 2004) (c) the exercise by a creditor of any set-off that he or she would have been entitled to exercise under section 150 if the company was in liquidation, the liquidation having commenced at the time that the moratorium period commenced; or (Amended by Act 11 of 2004) (d) the filing of an application for the appointment of a liquidator under Part VI. (Inserted by Act 11 of 2004) (5) Notwithstanding subsection (1)(a), the Court may make an order during the moratorium period— (a) appointing a liquidator on the grounds specified in section 162(1)(c); or (b) appointing a provisional liquidator on an application for the appointment of a liquidator on the grounds specified in section 162(1)(c). (6) On making an order under subsection (5), the Court shall either— (a) discharge the administration order and make such consequential provision as it considers fit; or (b) order that the appointment of the administrator shall continue to have effect.

68 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (7) If the Court makes an order under subsection (6)(b), it may also— (a) specify which of the powers of an administrator are to be exercisable by the administrator; (b) order that this Part has effect with such modifications as the Court may specify; and (c) make such consequential provision as it considers fit. Preservation of charged and other assets
85. (1) During the period beginning with the commencement of the
moratorium period in respect of a company and ending with the making of an administration order against it or the dismissal of the application, the company may not, without the written consent of the interested person concerned, or the leave of the Court granted under section 86, dispose of or otherwise deal with— (a) any assets subject to a charge, other than a floating charge; (b) any assets subject to a floating charge, otherwise than in the ordinary course of business; or (c) any assets in the company’s use, occupation or possession of which another person is the owner or lessor, including— (i) goods supplied under a hire purchase, conditional sale or chattel leasing agreement; and (ii) subject to subsection (1A), goods supplied subject to a retention of title agreement. (Amended by Act 11 of 2004) (1A) Subsection (1)(c)(ii) does not prevent a company disposing of or dealing with goods supplied subject to a retention of title agreement in the ordinary course of business. (Inserted by Act 11 of 2004) (2) A company that contravenes subsection (1) commits an offence. Disposal of perishable assets during moratorium period
86. (1) This section applies during the period beginning with the
commencement of the moratorium period and ending with— (a) the making of an administration order; or (b) the dismissal of the application for an administration order. (2) Where any assets referred to in section 85(1) are perishable assets, the Court may, on the application of the company, make an order permitting the company to dispose of those assets. (3) Where the Court makes an order under subsection (2) permitting a company to dispose of assets that are subject to a floating charge, the holder of the security interest has the same priority in respect of any assets of the company directly or indirectly representing the assets disposed of as he or she would have had in respect of the assets subject to the security interest.

LAW OF VIRGIN ISLANDS Insolvency Act 69 Revision Date: 1 Jan 2020 (4) It shall be a condition of an order made under subsection (2) permitting a company to dispose of assets referred to in section 85(1) that are not subject to a floating charge, that— (a) the net proceeds of the disposal; and (b) if those proceeds are less than such amount as the Court may determine, or as may be agreed, to be the fair market value of the assets disposed of, the sum required to make good the deficiency, shall be applied towards discharging the sums payable to the interested person concerned. (5) Where a condition under subsection (4) relates to two or more security interests, the net proceeds of the disposal and any sum required to be paid under subsection (4)(b) shall be applied towards discharging the sums secured by those security interests in the order of their priorities. (6) Where the Court makes an order under subsection (2) it may make such consequential orders as it considers fit, including— (a) giving directions as to the conduct of the disposal; (b) making provision for the protection of the proceeds of the disposal. (7) Where an order is made under subsection (2), the company shall, within 14 days of the date of the order, file with the Registrar a notice in the prescribed form together with a sealed copy of the order. (8) A company commits an offence if it— (a) contravenes subsection (7), without reasonable excuse; or (b) fails to comply with a condition imposed under this section. Administrators General duties of administrator
87. (1) An administrator shall, on his or her appointment, take into his or her
custody or under his or her control the assets to which the company in administration is or appears to be entitled. (2) The administrator shall manage the business, assets and affairs of the company— (a) in furtherance of the purposes set out in the administration order; (b) after the approval of proposals under section 102, in accordance with those proposals; and (c) in accordance with any directions that may be given by the Court. (3) In performing his or her functions and undertaking his or her duties under this Act, an administrator acts as an officer of the Court. (Substituted by Act 11 of 2004) (4) Whilst a company is in administration, the directors and other officers of the company remain in office and their powers, functions and duties continue except to the extent that—

70 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (a) they are inconsistent with the powers, functions and duties of the administrator; or (b) the administrator otherwise directs in writing. (Inserted by Act 11 of 2004) (5) Notwithstanding subsection (4), a director may exercise a power inconsistent with the powers, functions and duties of the administrator if the administrator authorises the exercise of that power in writing. (Inserted by Act 11 of 2004) (6) Any power conferred on the company in administration whether by an enactment, its memorandum or articles or otherwise, which could be exercised so as to interfere with the exercise by the administrator of his or her powers, shall not be exercised without the written consent of the administrator. (Inserted by Act 11 of 2004) Duty to prepare report
88. (1) The administrator of a company shall, within 60 days of the
commencement of the administration, prepare a report as to whether, in his or her opinion, further enquiries are desirable with respect to— (a) any matter relating to the promotion, formation or insolvency of the company or the conduct of the business or affairs of the company; and (b) possible claims under sections 254 to 256. (2) The administrator shall send a copy of the report prepared under subsection (1)— (a) to each creditor of the company; and (b) if in his or her report he or she states that further enquiries are desirable with respect to a matter referred to in subsection (1), to the Official Receiver. Duty to report to Commission
89. (1) Subject to subsection (2), if it appears to the administrator of a
company that the company is carrying on or has carried on unlicensed financial services business, he or she shall as soon as reasonably practicable report the matter to the Commission. (2) Subsection (1) does not apply where the administration order was made on the application of the Commission. (3) Where the administrator makes a report to the Commission under subsection (1) he or she shall, for the purposes of section 105, treat the company as if it was a regulated person. General powers of administrator
90. (1) The administrator of a company may—
(a) remove any director of the company;

LAW OF VIRGIN ISLANDS Insolvency Act 71 Revision Date: 1 Jan 2020 (b) appoint a person to be director of the company, whether to fill a vacancy or not; (c) call a meeting of the members or the creditors of the company; (d) require a receiver, other than a qualifying administrative receiver, to vacate office; (e) do anything necessary for the management of the business, assets and affairs of the company; (f) apply to the Court for directions in respect of the administration of the company; (g) use the company’s seal; and (h) do all acts on behalf of the company and execute any deed, receipt or other document in the name of the company. (2) Without limiting subsection (1), the administrator has the powers specified in Schedule 1. (3) The following persons are not concerned to inquire whether the administrator is acting within his or her powers— (a) a person dealing with the administrator in good faith and for value; and (b) a person who acquires any interest in assets of the company in administration from a person referred to in paragraph (a) in good faith and for value. (4) The acts of an administrator of a company are valid notwithstanding any defect in his or her nomination, appointment or qualifications. (5) Where a receiver is required to vacate office under subsection (1)(d) the Court, on the application of the administrator or the receiver, may make such directions as it considers appropriate, including directions as to— (a) the terms upon which assets are to be passed to the administrator; (b) the payment of the debts of preferential creditors; and (c) the payment of the remuneration of the receiver. (Amended by Act 11 of 2004) Power to deal with assets subject to floating charge
91. (1) The administrator of a company may dispose of any assets of the
company that are subject only to a floating charge, whether or not the charge has crystallised. (2) Where assets are disposed of or otherwise dealt with under subsection (1), the holder of the security interest has the same priority in respect of any assets of the company directly or indirectly representing the assets disposed of as he or she would have had in respect of the assets subject to the security interest. Application to Court to deal with other charged assets
92. (1) The Court may, on the application of the administrator, make an order
authorising the administrator to dispose of—

72 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (a) assets of the company that are subject to a security interest that is not a floating charge; and (b) assets that are being used or occupied by or in the possession of the company but of which some other person is the owner or lessor, including— (i) goods supplied under a hire purchase, conditional sale or chattel leasing agreement; and (ii) goods supplied subject to a retention of title agreement, if it considers that the disposal of the assets, with or without other assets, would be likely to promote one or more of the purposes specified in the administration order. (2) The administrator shall give 5 business days notice of an application under subsection (1) to— (a) the holder of the charge over; or (b) the owner or lessor of, the assets in respect of which the application is made. (3) It shall be a condition of an order under subsection (1) that— (a) the net proceeds of the disposal; and (b) if those proceeds are less than such amount as the Court may determine, or as may be agreed, to be the fair market value of the assets disposed of, the sum required to make good the deficiency, shall be applied towards discharging the sums payable to the interested person concerned. (4) Where a condition under subsection (3) relates to 2 or more security interests, the net proceeds of the disposal and any sum required to be paid under subsection (3)(b) shall be applied towards discharging the sums secured by those security interests in the order of their priorities. (5) Where an order is made under subsection (1), the administrator shall— (a) forthwith serve a sealed copy of the order on the holder of the charge or the owner or lessor of the goods, as the case may be; and (b) within 14 days of the date of the order, file a notice in the prescribed form with the Registrar. (6) An administrator commits an offence if he or she— (a) contravenes subsection (5), without reasonable excuse; or (b) fails to comply with a condition imposed under this section. Administrator as agent of company
93. When performing a function or exercising a power as administrator of a
company in administration, the administrator acts as the company’s agent.

LAW OF VIRGIN ISLANDS Insolvency Act 73 Revision Date: 1 Jan 2020 Removal and resignation of administrator
94. (1) The Court may, on the application of the creditors’ committee, a
creditor or the Official Receiver or on its own motion, remove an administrator from office. (Amended by Act 11 of 2004) (2) An administrator— (a) may resign in such circumstances as may be prescribed or with the leave of the Court; and (b) shall resign if he or she ceases to be an eligible insolvency practitioner. (3) Unless, in accordance with this section, he or she has previously resigned or been removed from office, an administrator ceases to hold office with effect from the date that an administration order is discharged. (Amended by Act 11 of 2004) Appointment of replacement administrator
95. (1) Where the administrator of a company dies or is removed or resigns
under section 94 and no administrator is appointed in his or her place, the Court, on the application of a person specified in subsection (2) or on its own motion— (a) if there is at least one administrator remaining in place, may appoint an eligible insolvency practitioner as administrator in his or her place; or (b) if the administrator who has died or is removed or resigned was the sole administrator of the company, shall appoint an eligible insolvency practitioner in his or her place. (Substituted by Act 11 of 2004) (2) An application under subsection (1) may be made— (a) by any continuing administrator; (b) by the creditor’s committee, if any; (Amended by Act 11 of 2004) (c) where there is no administrator or no creditor’s committee, by the company in administration, the board of the company or a creditor of the company; or (Amended by Act 11 of 2004) (d) by the Official Receiver. (Inserted by Act 11 of 2004) (3) The provisions of this Act and the Rules applicable to giving notice of and advertising an administration order apply to an order of the Court filling a vacancy under subsection (1). Remuneration of administrator
96. (1) The administrator of a company is entitled to receive remuneration for
his or her services as administrator.
(2) The remuneration payable to an administrator shall be fixed applying the principles set out in section 432.

74 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS Administrator to have charge over assets of company
97. (1) The administrator and, where he or she has vacated office, the former
administrator, has the following charges on the assets of the company in his or her possession or control or, in the case of a former administrator, that were in his or her possession or control immediately before vacating office— (a) a first ranking charge for any sums payable in respect of debts or liabilities incurred during the administration of the company, under contracts entered into by him or her or a predecessor of his or hers in the carrying out of the functions of administrator; and (b) a second ranking charge for his or her remuneration. (Amended by Act 11 of 2004) (2) Subject to subsection (3), the charges specified in subsection (1)— (a) rank in priority to any floating charge to which the assets of the company may be subject; and (b) continue to subsist after the termination of the administration. (3) Where a debenture or other instrument creates a fixed charge and a floating charge over the assets of a company, subsection (2)(a) does not apply to any assets of the company that are subject to the fixed charge. (3A) For the purposes of subsection (1)(a)— (a) any action taken or omitted to be taken within the period of 14 days after an administrator’s appointment shall not be taken to amount or contribute to the adoption of a contract; and (b) an administrator is deemed to have adopted a contract of employment if notice of the termination of the contract is not given within 14 days after the date of his or her appointment. (Inserted by Act 11 of 2004) (4) A liability arising out of a contract of employment adopted by an administrator, or his or her predecessor, is a debt or liability for the purposes of subsection (1)(a) if— (a) it is a liability to pay a sum by way of wages or salary or a contribution to an occupational pension scheme; and (b) it is in respect of services rendered wholly or partly after the adoption of the contract, but not otherwise. (Amended by Act 11 of 2004) (5) For the purposes of subsection (4)— (a) wages or salary payable in respect of a period of holiday or absence from work through sickness or other good cause are deemed to be wages or salary in respect of services rendered in that period; (b) a sum payable in lieu of holiday is deemed to be wages or salary in respect of services rendered in the period by reference to which the holiday entitlement arose; and

LAW OF VIRGIN ISLANDS Insolvency Act 75 Revision Date: 1 Jan 2020 (c) that part of the liability representing payment in respect of services rendered before the adoption of the contract of employment shall be disregarded. Release of administrator
98. (1) A person who ceases to be the administrator of a company, may apply
to the Court for his or her release and the Court may grant the release unconditionally or upon such conditions as it considers proper, or it may withhold it. (2) If the Court withholds the release, it may make a compensation order against the former administrator under section 254. (3) Subject to subsection (5), where a former administrator is released under this section, he or she is discharged from all liability in respect of any act or default of his or hers in relation to the administration of the company. (4) An order for the release of a former administrator may be revoked by the Court if the release was obtained by fraud or the suppression or concealment of any material fact. (5) Subsection (3) does not prevent the Court from making an order under
section 254 against an administrator who has been released under this section.
(6) An administrator who obtains his or her release under this section shall file a notice in the prescribed form with the Registrar. Statement of affairs
99. (1) In this section, “relevant person” has the meaning set out in section
275.
(2) The administrator of a company may require one or more relevant persons to prepare and submit to him or her a statement of affairs. (3) Subject to section 280, the administrator shall file with the Court each statement of affairs and each affidavit of concurrence that he or she receives. Administrator’s Proposals Administrator’s proposals and creditors’ meeting
100. (1) Subject to subsection (3), the administrator shall—
(a) prepare a report setting out his or her proposals for the achievement of one or more of the purposes in the administration order; (b) call a meeting of creditors for a date no later than 60 days after the date of the administration order for the purpose of considering whether to approve his or her proposals; (c) send a copy of his or her report, to each creditor together with the notice of the meeting;

76 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (d) send a copy of the notice calling the meeting and his or her report to each member of the company or advertise the meeting and report in accordance with the Rules; (Amended by Act 11 of 2004) (e) file a copy of the notice calling the meeting together with his or her report with the Registrar; and (f) cause the creditors’ meeting to be advertised. (2) The report prepared by the administrator under subsection (1)(a) shall contain the matters prescribed by the Rules. (3) The administrator is not required to call a meeting of creditors under subsection (1)(b) where— (a) he or she is of the opinion that the company has sufficient assets to enable each creditor of the company to be paid in full; and (b) the report prepared under subsection (1)(a) contains a statement that— (i) the administrator is of the opinion that the company has sufficient assets to enable each creditor of the company to be paid in full; and (ii) the administrator does not intend to call a meeting of creditors under this section. (4) Notwithstanding subsection (3), if requested to do so by creditors whose debts amount to at least 10% in value of the total debts of the company, the administrator shall call a meeting of creditors to be held no later than 30 days after the date upon which he or she receives the request. (5) A request for a meeting under subsection (4) must be delivered to the administrator in the manner and within the period prescribed. (6) An administrator who contravenes subsection (1) commits an offence. Attendance at meeting of directors and others
101. (1) If the administrator considers that it is reasonable to require the
presence at a creditors’ meeting called under section 100 of a person specified in subsection (4), the administrator may, by notice, require the person to attend. (Amended by Act 11 of 2004) (2) In determining whether it is reasonable to require a person to attend the creditors’ meeting, the matters that the administrator shall have regard to include— (a) the likely benefits of the person’s attendance; (b) the travel and associated expenses that will be incurred by him or her in attending the meeting, unless the administrator is prepared to pay those expenses; (c) the distance that he or she would be required to travel to attend the meeting; and (d) the time that it would take him or her to travel to and from and attend the meeting.

LAW OF VIRGIN ISLANDS Insolvency Act 77 Revision Date: 1 Jan 2020 (3) A notice under subsection (1) requiring a person to attend a creditors’ meeting shall be sent to that person at least 14 days prior to the date of the meeting and shall be accompanied by a copy of his or her report on his or her proposals. (4) Subsection (1) applies to any officer of the company and any person who, at any time during the 2 years prior to the date of the notice, was an officer of the company. (5) A person commits an offence if— (a) he or she receives a notice to attend a creditors’ meeting under subsection (1); and (b) without reasonable excuse, he or she fails to attend the meeting. Consideration of proposals by creditors
102. (1) At the creditors’ meeting called under section 100, the creditors may
resolve to—
(a) approve the administrator’s proposals, with or without amendment; (b) reject the proposals; or (c) adjourn the meeting. (2) A resolution to approve the administrator’s proposals is invalid and of no effect if— (a) the proposals have been amended without the consent in writing of the administrator; or (b) the proposal has been amended otherwise than in accordance with
section 103.
(3) The administrator shall, within 14 days of the conclusion of a meeting called under section 100— (a) report the result of the meeting to the Court and file a copy of that report with the Registrar; and (b) send a notice setting out the result of the meeting to every creditor. (4) The report and notice required under subsection (3) shall have annexed to it details of— (a) the proposals considered at the meeting and of any amendments to those proposals that were considered; and (b) such proposals and amendments as were approved. (5) If the creditors resolve not to approve the administrator’s proposals or fail to pass one of the resolutions specified in subsection (1), the Court may, by order— (a) discharge the administration order and make such consequential provisions as it considers fit; (b) adjourn the hearing, conditionally or unconditionally; or

78 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (c) make an interim order or any other order that it considers fit. (6) An administrator who contravenes subsection (3) commits an offence. Amendment of proposals at creditors’ meeting
103. (1) Where, at a meeting called under section 100, the creditors wish to
approve an amended proposal, the meeting shall be adjourned for sufficient time to enable the administrator to give all creditors not present or represented at the meeting at least 2 business days notice— (a) of the venue of the adjourned meeting; and (b) of the amended proposal to be considered at the adjourned meeting. (2) Where a meeting is adjourned under subsection (1), section 102 applies to the adjourned meeting. (3) Subsection (1) does not apply if— (a) every creditor who was given notice of the meeting under section 100 is present or represented at the meeting; or (b) the chairman of the meeting certifies in writing that an amendment is to correct minor errors or is otherwise not material. Modification of proposals
104. (1) Where proposals have been approved under section 102 and the
administrator subsequently considers that they should be substantially modified, he or she shall— (a) prepare a report setting out his or her proposed modifications; (b) call a meeting of creditors for the purpose of considering the report; (c) send a copy of his or her report to each creditor together with the notice of the meeting; (d) send a copy of the notice convening the meeting together with his or her report to each member of the company or advertise the meeting and report in accordance with the Rules; (Amended by Act 11 of 2004) (e) file a copy of the notice calling the meeting together with his or her report with the Registrar; and (f) cause the creditors’ meeting to be advertised. (2) At the creditors’ meeting referred to in subsection (1), the creditors may resolve to— (a) approve the administrator’s proposed modifications to the proposals, with or without amendment; (b) reject the proposed modifications; or (c) adjourn the meeting.

LAW OF VIRGIN ISLANDS Insolvency Act 79 Revision Date: 1 Jan 2020 (3) Section 102(2) applies to the creditors’ approval of the administrator’s proposed modifications to the proposal under this section and if the creditors wish to amend the administrator’s proposed modifications, section 103 applies. (4) The administrator shall, within 14 days of the date of the meeting held under subsection (1)— (a) report the result of the meeting to the Court and file a copy of the report with the Registrar; and (b) send a notice setting out the result of the meeting to every creditor. (5) The report and notice required under subsection (4) shall have annexed to it details of— (a) the modifications to the proposal considered at the meeting and of any amendments to those modified proposals that were considered; and (b) such proposals and amendments as were approved. (6) An administrator who contravenes subsection (4) commits an offence. Miscellaneous Commission’s rights where company a regulated person
105. Where a company in administration is or has been a regulated person—
(a) every notice or other document required to be sent to a creditor of the company under this Part shall also be sent to the Commission; and (b) notice shall be given to the Commission of any application to the Court under this Part in respect of the company. Administrator’s duty to keep accounting records
106. (1) An administrator shall keep accounting records that correctly record
and explain the receipts, expenditure and other transactions of the company in administration. (2) The administrator shall retain the accounting records kept under subsection (1) for a period of not less than 6 years after the termination of the administration. (3) An administrator who contravenes this section commits an offence. Administrator to prepare and send out regular accounts and reports
107. (1) An administrator shall prepare—
(a) accounts of the receipts and payments of the company in administration; and (b) a report on the progress of the administration, covering the periods specified in subsection (2). (2) The accounts and report prepared under subsection (1) shall cover—

80 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (a) the period of 6 months following his or her appointment; (b) each subsequent period of 6 months; and (c) where he or she ceases to act as administrator— (i) the period from the end of the period covered by the last accounts required to be prepared under this section, or if he or she acted as administrator for less than 6 months from the date of his or her appointment, to the date of his or her ceasing to act; and (ii) the period from the date of his or her appointment to the date of his ceasing to act, unless prepared in accordance with subparagraph (i). (3) An administrator shall, within 60 days of the last day of the period covered by the accounts and report— (a) file a copy of the accounts and report with the Court and with the Registrar; (b) send a copy of the accounts and report to each member of the creditors’ committee, if any; and (c) if the company is or has been a regulated person file a copy of the accounts and report with the Commission. (Amended by Act 11 of 2004) (4) An administrator who contravenes this section commits an offence. Notification
108. (1) Where a company is in administration, every document of a type
specified in subsection (2) shall—
(a) state that the company is in administration; and (b) specify the name of the administrator. (2) Subsection (1) applies to— (a) every public document issued by or on behalf of the company; and (b) every public document issued by or on behalf of the administrator of the company on which the name of the company appears. (2A) A failure to comply with subsection (1) does not affect the validity of the document. (Inserted by Act 11 of 2004) (3) If subsection (1) is contravened the company, and each officer or administrator of the company who causes, permits or acquiesces in the contravention, commits an offence. Meetings of creditors
109. (1) The administrator shall call a meeting of creditors if—
(a) a meeting is requisitioned by the creditors of the company in accordance with subsection (2); or

LAW OF VIRGIN ISLANDS Insolvency Act 81 Revision Date: 1 Jan 2020 (b) he or she is directed to do so by the Court. (2) A creditors’ meeting may be requisitioned in accordance with the Rules by 10% in value of the creditors of the company. Discharge or variation of administration order
110. (1) The administrator of a company may, at any time, apply to the Court
for the administration order to be discharged or to be varied to add to or change the purposes specified in the administration order. (2) An administrator shall make an application under subsection (1) if— (a) he or she considers that the purposes specified in the order have been achieved or are incapable of achievement; or (b) he or she is required to do so by a meeting of creditors. (3) On the hearing of an application under subsection (1), the Court may discharge or vary the administration order and make such consequential provision as it considers fit, or adjourn the hearing conditionally or unconditionally, or make an interim order or any other order it considers fit, including an order under section 111. Appointment of liquidator or dissolution of company on discharge of administration order
111. (1) Where the Court makes an order for the discharge of an
administration order made in respect of a company and the Court is satisfied that the company is insolvent— (a) the Court may make an order for the appointment of an eligible insolvency practitioner to be the liquidator of the company; or (b) if it is satisfied that no useful purpose would be served by the appointment of a liquidator, the Court may dissolve the company. (2) The Court may appoint the administrator of a company to be the liquidator under subsection (1)(a). (3) An order under subsection (1)(a) takes effect as an order made under
section 162 on the application of the company.
(4) Where an order is made for the appointment of a liquidator under this
section, Part VI applies to the liquidation of the company.
Filing copy of discharge order with Registrar
112. (1) Where an administration order is discharged or varied, the
administrator or where the order is discharged the person who, immediately before the discharge, was the administrator of the company shall, within 14 days of the date of the order effecting the variation or discharge, file a copy of the order with the Registrar. (2) A person who contravenes subsection (1) commits an offence.

82 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS Protection of Interests of Creditors and Members Application in respect of moratorium period
113. (1) During the period beginning with the commencement of the
moratorium period and ending with the making of an administration order, the Court may, on an application made by a creditor or member of the company, by a person affected by section 84 or, where the company is or has been a regulated person, by the Commission— (a) give directions in relation to any matter arising in connection with that section; or (b) make such other order as it considers fit. (2) Without limiting subsection (1), an order under that subsection may— (a) regulate the management by the directors of the company’s affairs, business and assets during the remainder of the moratorium period; (b) require the directors to refrain from doing or continuing an act complained of by the applicant, or to do an act that the applicant has complained they have omitted to do; (c) require the calling of a meeting of creditors or members for the purpose of considering such matters as the Court may direct; and (d) make such provision as the Court considers necessary to protect the interests of one or more creditors of the company during the moratorium period. (3) In making an order under this section, the Court shall have regard to the need to safeguard the interests of persons who have dealt with the company in good faith and for value. Application on grounds of unfair prejudice
114. (1) At any time when an administration order is in force, an application
may be made by a creditor or member of a company or, where the company is or has been a regulated person by the Commission for an order under subsection (2) on one or both of the following grounds— (a) that the company’s affairs, business and assets are being, or have been, managed by the administrator in a manner which unfairly prejudices the interests of the member or creditor; or (b) that any actual or proposed act or omission of the administrator is or would be so prejudicial. (2) Subject to subsections (3) and (4), where it is satisfied as to either of the grounds specified in subsection (1), the Court may make such order as it considers fit for giving relief in respect of the matters complained of, or adjourn the hearing conditionally or unconditionally, or make an interim or any other order that it considers fit. (3) An order under subsection (2) shall not prejudice or prevent—

LAW OF VIRGIN ISLANDS Insolvency Act 83 Revision Date: 1 Jan 2020 (a) the implementation of proposals approved by the creditors under
section 102; or
(b) where the application for the order was made more than 28 days after the approval of any proposals or revised proposals under
section 102 or 104, the implementation of those proposals or
revised proposals.
(4) Without limiting subsection (2), an order under that subsection may— (a) regulate the management by the administrator of the company’s affairs, business and assets; (b) require the administrator to refrain from doing or continuing an act complained of by the applicant, or to do an act that the applicant has complained he or she has omitted to do; (c) require the calling of a meeting of creditors or members for the purpose of considering such matters as the Court may direct; and (d) discharge the administration order and make such consequential provision as the Court considers fit. (5) Section 91 is not to be taken as prejudicing an application to the Court under this section.
PART IV
RECEIVERSHIP
Preliminary
Interpretation for and scope of this Part
115. (1) In this Part, unless the context otherwise requires, “company” means
the company in respect of whose assets a receiver is or may be appointed. (2) This Part applies to a receiver appointed— (a) by the Court; (b) under a debenture or other instrument; or (c) under or in accordance with any other enactment. (3) Unless this Act expressly states otherwise, where, in respect of a receiver appointed by the Court (other than as an administrative receiver), there is a conflict between this Act and the provisions of any other enactment or rule of law or the Civil Procedure Rules, the provisions of the enactment or rule of law or the Civil Procedure Rules, as the case may be, shall prevail. (4) Where an administrative receiver is appointed in respect of a company, that company is referred to in this Act as “in administrative receivership”.

84 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS General Persons not to be appointed or act as receiver
116. (1) Subject to subsection (2), the following persons are not eligible to be
appointed as receiver in respect of a company and shall not accept appointment or act as such a receiver— (a) a mortgagee of any assets of the company; (b) a person who is, or within the previous 2 years has been— (i) an officer or employee of a mortgagee of any assets of the company; or (ii) a shareholder in or member of the company or a related company; (c) a person who, pursuant to section 477 is disqualified from holding a licence; (d) a person who, in an insolvency proceeding, would not be eligible to act as an insolvency practitioner in respect of the company pursuant to section 482(2); (e) a body corporate; (ea) the Official Receiver; and (Inserted by Act 11 of 2004) (f) such other persons as may be prescribed. (2) The Court may appoint— (a) the Official Receiver; or (b) such other person specified in subsection (1), as a receiver, other than an administrative receiver. (Amended by Act 11 of 2004) (3) A person who accepts or purports to accept appointment or acts or purports to act as a receiver contrary to subsection (1) commits an offence. Appointment of joint receivers
117. (1) A power conferred by a debenture or other instrument to appoint a
receiver includes the power to appoint— (a) 2 or more joint receivers; (b) an additional receiver to act jointly with the receiver in office; and (c) a receiver to succeed a receiver who has vacated office, unless the debenture or other instrument expressly provides otherwise. (2) Joint receivers may act jointly or severally unless the instrument under which, or the Court order by which, they are appointed expressly provides otherwise. (3) Unless the context otherwise requires, in this Act and the Rules, “receiver” and “administrative receiver” includes 2 or more persons appointed as joint receivers or joint administrative receivers, as the case may be.

LAW OF VIRGIN ISLANDS Insolvency Act 85 Revision Date: 1 Jan 2020 Notice of appointment
118. (1) A receiver shall forthwith upon being appointed—
(a) send a notice of his or her appointment to the company; and (b) file a notice of his or her appointment— (i) with the Registrar; and (ii) if the company is or has been a regulated person, with the Commission. (2) In addition to complying with subsection (1), an administrative receiver shall— (a) subject to subsection (3), within 5 business days after being appointed, cause a notice of his or her appointment to be advertised; and (b) within 28 days after being appointed, send a notice of his or her appointment to all creditors of the company in receivership. (3) Subsection (2)(a) does not apply to a receiver appointed— (a) to act jointly with an existing administrative receiver; or (b) to act in place of an administrative receiver who has died or ceased to act. (4) A receiver who contravenes subsection (1) and an administrative receiver who contravenes subsection (2) commits an offence. Notification of receivership
119. (1) Where a company is in receivership, every document to which
subsection (2) applies shall contain a statement that a receiver has been appointed. (2) Subsection (1) applies to— (a) where the company is in administrative receivership, every public document issued by or on behalf of the company; (Amended by Act 11 of 2004) (b) where the company is in administrative receivership, every public document issued by or on behalf of the receiver or any liquidator of the company on which the name of the company appears; and (Amended by Act 11 of 2004) (c) where a receiver is appointed in relation to a specific asset or specific assets, every public document issued by or on behalf of the company, or the receiver, that relates to that asset or those assets. (Inserted by Act 11 of 2004) (3) A failure to comply with subsection (1) does not affect the validity of the document. (4) A person who contravenes subsection (1), or who causes, permits or acquiesces in a contravention of subsection (1), commits an offence.

86 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS Vacation of office
120. (1) The office of receiver becomes vacant if the person holding the
office—
(a) dies;
(b) resigns;
(c) vacates his or her office in accordance with subsection (2); or (d) is removed from office in accordance with section 123. (2) A receiver appointed out of court shall vacate his or her office forthwith if he or she ceases to be eligible to act as a receiver in accordance with
section 116(1).
(3) Where a receiver resigns, vacates office in accordance with subsection (2) or is removed from office under section 123, he or she shall, as soon as practicable, give notice to— (a) the person who appointed him or her and any joint receiver; (b) the company; or— (i) if the company is in liquidation, its liquidator; and (ii) if the company is in administration, its administrator; and (c) the members of the creditors’ committee, if any. (Amended by Act 11 of 2004) (4) A receiver appointed by the Court shall as soon as practicable notify the Court if he or she ceases to be eligible to act as a receiver in accordance with
section 116(1).
(5) Where a receiver resigns, vacates office in accordance with subsection (2) or is removed from office under section 123, he or she shall, within 7 days of ceasing to hold office, give notice in the prescribed form to the Registrar and, where the company in respect of which he or she was appointed is, or has been, a regulated person, to the Commission. (Substituted by Act 11 of 2004) (6) Where a receiver vacates office, unless the Court otherwise orders— (a) his or her remuneration; and (b) any indemnity to which he or she is entitled out of the assets of the company, shall be charged on and paid out of any assets of the company that are in his or her custody or under his or her control at that time in priority to any security interest held by the person by or on whose behalf he or she was appointed. (7) A person who contravenes subsections (2), (3), (4) or (5) commits an offence. Assistance to be provided by receiver vacating office
121. (1) A person vacating the office of receiver shall provide such
information and give such assistance in the conduct of the receivership as is reasonably required by any remaining joint receiver or his or her successor.

LAW OF VIRGIN ISLANDS Insolvency Act 87 Revision Date: 1 Jan 2020 (2) If a person vacating the office of receiver fails to provide information or give assistance as required under subsection (1) the Court may, on the application of the remaining joint receiver or successor, order the person vacating office to provide such information and give such assistance as is reasonably required within such time as is specified in the order. (3) A person who fails to comply with an order made under subsection (2) commits an offence. Resignation of receiver
122. (1) The resignation of an administrative receiver appointed out of court is
not effective unless he or she has given not less than 7 days notice of his or her intention to resign to— (a) the person who appointed him or her; (b) the company in receivership, or if it is in liquidation, its liquidator; and (c) the members of the creditors’ committee, if any. (2) Unless the Court otherwise orders, the resignation of a receiver appointed by the Court is not effective unless he or she has given at least 7 days notice of his or her intention to resign to the Court and to such other persons as may be specified by the Court. (3) A notice given under subsection (1) shall state the date upon which the receiver intends his or her resignation to take effect. Removal of receiver
123. (1) A receiver appointed out of court, other than an administrative
receiver, may be removed—
(a) in accordance with the charge or other instrument under which he or she was appointed; or (b) by order of the Court. (2) A receiver appointed by the Court and an administrative receiver may be removed by order of the Court, but not otherwise. (3) Application to the Court for the removal of a receiver under subsection (1) or subsection (2) may be made by — (a) the company; or— (i) if the company is in liquidation, its liquidator; and (ii) in the case of a receiver who is not an administrative receiver, if the company is in administration, its administrator; (b) the board of the company; (c) the person by or on whose behalf the receiver was appointed; (d) a creditor of the company; (da) where the company is or has been a regulated person, by the Commission; or (Inserted by Act 11 of 2004)

88 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (e) any other person who the Court is satisfied has a legitimate interest in the removal of the receiver. (4) An application to the Court for the removal of a receiver under this
section shall specify the grounds upon which the removal of the receiver is being
sought and shall be served on the receiver at least 5 business days prior to the date fixed for the hearing of the application. Co-operation with receiver
124. (1) Where a receiver is appointed, the company and every officer of the
company shall—
(a) make available to the receiver all books, documents and information relating to the assets in respect of which the receiver has been appointed in its or his or her possession or under its or his or her control; (b) if required to do so by the receiver, verify by statutory declaration that the books, documents and information are complete and correct; and (c) give the receiver such assistance as he or she may reasonably require. (2) On the application of the receiver, the Court may make an order requiring the company or an officer of the company to comply with subsection (1). (3) A person who fails to comply with an order of the Court made under subsection (2) commits an offence. Duty to report to Commission
125. If it appears to a receiver that the company in respect of which he or she
was appointed is carrying on or has carried on unlicensed financial services business, he or she shall as soon as reasonably practicable report the matter to the Commission. Agency
126. (1) A receiver appointed out of court, other than an administrative
receiver, is deemed to be the agent of the company unless the charge or instrument under which he or she was appointed expressly provides otherwise. (2) Subject to subsection (3), an administrative receiver is deemed to be the agent of the company in receivership. (3) If a liquidator is appointed in respect of a company in receivership, the agency of any receiver, including an administrative receiver, terminates with immediate effect. Powers of receiver, other than administrative receiver
127. (1) A receiver has the powers expressly or impliedly conferred on him or
her—

LAW OF VIRGIN ISLANDS Insolvency Act 89 Revision Date: 1 Jan 2020 (a) in the case of a receiver appointed out of court, by the charge or other instrument by which he or she was appointed; or (b) in the case of a receiver appointed by the Court, by the Court order under which he or she was appointed. (2) Unless the charge or other instrument under which, or Court order by which, he or she was appointed expressly provides otherwise, a receiver may— (a) demand and recover, by action or otherwise, income of the assets in respect of which he or she was appointed; (b) issue receipts for income recovered; (c) manage, insure, repair and maintain the assets in respect of which he or she was appointed; and (d) exercise, on behalf of the company, a right to inspect books or documents that relate to the assets in respect of which he or she was appointed in the possession or under the control of a person other than the company. (3) This section does not apply to an administrative receiver. General duties of receivers
128. (1) The primary duty of a receiver is to exercise his or her powers—
(a) in good faith and for a proper purpose; and (b) in a manner he or she believes, on reasonable grounds, to be in the best interests of the person in whose interests he or she was appointed. (2) To the extent consistent with subsection (1), a receiver shall exercise his or her powers with reasonable regard to the interests of— (a) creditors of the company; (b) sureties who may be called upon to fulfil obligations of the company; (c) persons claiming, through the company, an interest in assets in respect of which he or she was appointed; and (d) the company. (3) Where a receiver appointed out of court acts or refrains from acting in accordance with any directions given by the person in whose interests he or she was appointed, the receiver is not in breach of the duty specified in subsection (1)(b), but is nevertheless liable for any breach of the duties specified in subsection (1)(a) and subsection (2). Powers of sale and proceeds of sale
129. (1) A receiver who exercises a power of sale of assets in respect of which
he or she was appointed owes a duty to— (a) creditors of the company; (b) sureties who may be called upon to fulfil obligations of the company;

90 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (c) persons claiming, through the company, an interest in assets in respect of which he or she was appointed; and (d) the company, to obtain the best price reasonably obtainable at the time of sale. (2) A receiver shall keep money relating to the assets in respect of which he or she was appointed separate from other money received in the course of, but not relating to, those assets and from other money held by him or her or under his or her control. (3) Notwithstanding any other enactment or rule of law to the contrary or anything contained in the debenture or other instrument by which a receiver was appointed— (a) it is not a defence in proceedings against a receiver for a breach of the duty imposed by subsection (1) that the receiver was acting as the agent of the company or under a power of attorney from the company; and (b) a receiver is not entitled to compensation or an indemnity from the assets in respect of which he or she was appointed or the company in respect of any liability incurred by the receiver arising from a breach of the duty imposed by subsection (1). Liabilities of receivers
130. (1) Subject to subsections (2) and (3), a receiver is personally liable—
(a) on any contract entered into by him or her in the performance of his or her functions; and (b) for the payment of wages or salary, including amounts due for holidays and absence due to sickness or other good cause, sums payable in lieu of holiday and contributions to an occupational pension scheme that, during the period of the receivership, accrue under a contract of employment adopted by him or her in the performance of those functions. (Amended by Act 11 of 2004) (2) A receiver appointed out of court is not personally liable on a contract referred to in subsection (1)(a) to the extent that the contract excludes or limits his or her liability. (3) Where a receiver is appointed by the Court, other than as an administrative receiver, unless the Court orders otherwise, all contracts of employment are terminated with immediate effect and subsection (1)(b) does not apply. (4) For the purposes of subsection (1)(b)— (a) any action taken or omitted to be taken within the period of 14 days after a receiver’s appointment shall not be taken to amount or contribute to the adoption of a contract; and (b) a receiver is deemed to have adopted a contract of employment if notice of the termination of the contract is not given within 14 days after the date of his or her appointment. (Substituted by Act 11 of 2004)

LAW OF VIRGIN ISLANDS Insolvency Act 91 Revision Date: 1 Jan 2020 (5) A receiver is entitled to an indemnity in respect of his or her liability under subsection (1) out of the assets in respect of which he or she was appointed. (6) Nothing in this section— (a) imposes any liability on a receiver for wages or salary, including amounts due for holidays or absence due to sickness, or contributions to an occupational pension scheme, in respect of services rendered prior to the commencement of the receivership; (b) limits any right to indemnity that the receiver would have apart from this section; (c) limits the liability of a receiver on a contract entered into without authority; or (d) confers on a receiver a right to an indemnity in respect of his or her liability on a contract entered into without authority. Payment of debts out of assets subject to a floating charge
131. (1) This section applies where a receiver is appointed on behalf of the
holder of a floating charge.
(2) If the company is not in liquidation, its preferential creditors shall be paid out of the assets coming into the hands of the receiver in priority to any claims for principal or interest in respect of— (a) the debenture or other instrument under which the receiver is appointed; and (b) any other debenture or other instrument of the company secured by a floating charge. (3) Payments made under this section shall be recouped, as far as possible, out of the assets of the company available for payment of unsecured creditors. Court directions
132. (1) On the application of a person referred to in subsection (2), the Court
may, in relation to any matter arising in connection with the performance of the functions of a receiver, make one or more of the following orders— (a) an order giving such directions as it considers appropriate; (b) an order declaring the rights of persons before it; and (c) such other order as it considers just. (2) Application to the Court for an order under subsection (1) may be made by any of the following persons— (a) the receiver; (b) the person by whom or on whose behalf the receiver was appointed; (c) a person in whose interest the receiver is acting; and

92 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (d) where the company in receivership is or has been a regulated person, the Commission. Further provisions with respect to an order under section 132
133. The power of the Court to make an order under section 132—
(a) is in addition to any other powers that may be exercised by the Court whether under this Act or any other enactment or in its inherent jurisdiction; (b) may be exercised notwithstanding that the receiver may have died or ceased to act as receiver before the making of the application or the order; and (c) notwithstanding anything in the Civil Procedure Rules to the contrary, includes the power to vary or amend an order that the Court has already made. Remuneration of receivers
134. (1) Subject to subsection (3), a receiver appointed under a debenture or
other instrument is entitled to be paid remuneration for his or her services— (a) in accordance with the terms of that debenture or other instrument; or (b) as agreed with the person on whose behalf he or she was appointed. (2) A receiver appointed by the Court or in accordance with any other enactment is entitled to be paid such remuneration as the Court may order or the other enactment may provide for. (Amended by Act 11 of 2004) (3) On the application of a person referred to in subsection (6), the Court may review and fix the amount paid or to be paid by way of remuneration to a receiver in accordance with subsection (1). (4) Subject to subsection (5), the Court’s power under subsection (3) — (a) extends to fixing the remuneration for any period before the making of the order or the application for it; (b) is exercisable notwithstanding that the receiver has died or ceased to act before the making of the application or the order; and (c) extends to requiring him or her or his or her personal representative to account for the excess or such part of it as may be specified in the order to the extent that an amount paid to or retained by a receiver as remuneration exceeds that fixed by the Court for the period concerned. (5) The power conferred by subsection (4)(c) may not be exercised with respect to a period before the date of the application for an order under this
section unless the Court is satisfied that there are special circumstances that
justify it.
(6) An application to the Court for an order under subsection (3) may be made by any of the following persons—

LAW OF VIRGIN ISLANDS Insolvency Act 93 Revision Date: 1 Jan 2020 (a) the receiver; (b) the company; or— (i) if the company is in liquidation, its liquidator; and (ii) if the company is in administration, its administrator; (c) a person claiming through the company an interest in the assets in respect of which the receiver was appointed; and (d) if the company in receivership is or has been a regulated person, the Commission. (7) In fixing the remuneration of a receiver under this section, the Court shall apply the general principles specified in section 432. Accounting records
135. (1) A receiver shall keep accounting records that correctly record and
explain the receipts, expenditure and other transactions relating to the assets in respect of which he or she has been appointed. (2) The accounting records kept under subsection (1) shall be retained for a period of not less than 6 years after the receivership ends. Receivership accounts to be filed with Registrar
136. (1) A receiver shall prepare accounts of his or her receipts and payments
covering the periods specified in subsection (2).
(2) Accounts prepared under subsection (1) shall cover the following periods— (a) the period of 12 months following the receiver’s appointment; (b) each subsequent period of 6 months; (c) where the receiver ceases to act as receiver— (i) the period from the end of the period covered by the last accounts required to be filed under this section, or if he or she acted as receiver for less than 12 months from the date of his or her appointment, to the date of his or her ceasing to act; and (ii) the period from the date of his or her appointment to the date of his or her ceasing to act, unless filed in accordance with subparagraph (i). (3) The accounts prepared under subsection (1) shall— (a) comprise an abstract showing all receipts and payments during the period covered by the accounts; and (b) within 30 days of the last day of the period covered by the accounts— (i) be filed with the Registrar; and (ii) if the company in receivership is or has been a regulated person, with the Commission.

94 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (4) A receiver appointed by the Court shall, in addition to complying with subsection (3), file at Court accounts in such form, covering such periods and within such time as the Court may order. (5) In respect of a receiver appointed by the Court— (a) the obligations imposed by this section are additional— (i) to any obligations or requirements concerning receivership accounts contained in the Civil Procedure Rules; and (Amended by Act 11 of 2004) (ii) to any order made with respect to receivership accounts by the Court; and (b) the Court may set aside the application of subsections (1), (2) and (3) to such extent and on such terms and conditions as it considers fit. (6) The Registrar may, on the application of a receiver, extend the period for the filing of accounts under this section for a period of, or where he or she grants more than one extension, for an aggregate period not exceeding 3 months. (7) A receiver who contravenes this section commits an offence. (8) Nothing in this section affects or limits the duty of a receiver to prepare and render proper accounts imposed otherwise than by this section. Enforcement of duty to make returns
137. (1) If a receiver—
(a) having made default in filing, delivering or making any return, account or other document, or in giving any notice, which a receiver is required to file, deliver, make or give under this Act or any other enactment fails to make good the default within 14 days after the service on him or her of a notice requiring him or her to do so; or (b) being a receiver appointed out of court, has, after being required at any time by the liquidator of the company to do so, failed to render proper accounts of his or her receipts and payments and to vouch them and pay over to the liquidator the amount properly payable to him or her, the Court may, on an application being made to it, order the receiver to make good the default within such time as may be specified in the order or, in respect of a default referred to in subsection (1)(a), may relieve the receiver of the obligation, in whole or in part. (2) An application to the Court may be made— (a) in respect of a default referred to in subsection (1)(a), by the Registrar, a member or creditor of the company, its board or, if appropriate, its liquidator or administrator or the Commission; and (b) in respect of a default referred to in subsection (1)(b), by the liquidator of the company.

LAW OF VIRGIN ISLANDS Insolvency Act 95 Revision Date: 1 Jan 2020 (3) The Court may order that the receiver pay the costs of and incidental to an application under subsection (1). (4) This section does not affect the operation of this Act or any other enactment that may impose penalties on receivers in respect of a default of the type referred to in subsection (1). (5) A receiver who fails to comply with an order made under this section commits an offence. Completion of receivership
138. On the completion of his or her receivership, a receiver shall forthwith—
(a) give notice to—
(i) the company, or if it is in administration or liquidation, the administrator or liquidator; (ii) in the case of an administrative receiver, the creditors’ committee, if any; and (iii) if the company is or has been a regulated person, to the Commission; and (b) file a notice of completion with the Registrar and, if the company is or has been a regulated person, with the Commission. Receivers Appointed out of Court Appointment of receiver out of court
139. (1) The appointment of a receiver out of court shall be made in writing.
(2) Subject to subsection (3), the appointment of a receiver out of court takes effect from the time upon which the receiver receives the written notice of appointment. (3) The appointment of a receiver out of court is not effective unless the receiver accepts it before the end of the next business day following the day on which he or she receives the written appointment. (4) Where 2 or more joint receivers are appointed out of court— (a) the joint appointment takes effect from the time that all joint receivers receive the written appointment; and (b) the joint appointment is not effective unless each receiver accepts the appointment in accordance with subsection (3). (5) Where a receiver is appointed out of court, whether as a sole or joint receiver, he or she shall, if he or she accepts the appointment, within 7 days confirm his or her acceptance in writing to the person who appointed him or her. (6) Subsection (5) does not apply where an appointment is accepted in writing. (7) For the purposes of this section—

96 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (a) a person receives a written appointment if the appointment is received on his or her behalf; and (b) an acceptance or confirmation of acceptance of an appointment as a receiver under this section may be given by any person authorised for that purpose by the appointee. (8) A written acceptance or confirmation of acceptance of an appointment of a receiver out of court shall state— (a) the time and date of receipt of the notice of appointment; and (b) the time and date of the acceptance. Execution of documents
140. Where a receiver appointed out of court, other than an administrative
receiver, is authorised to execute documents in the name of or on behalf of a company, whether under a power of attorney or otherwise, that authority continues in respect of documents necessary or incidental to the receiver’s powers notwithstanding that the company may go into liquidation. Invalid appointment
141. (1) Where the appointment of a person as a receiver appointed out of
court is invalid the Court may, if it is satisfied that the receiver acted honestly and reasonably, order the person by whom or on whose behalf the receiver was appointed to indemnify the receiver against any liability which arises solely by reason of the invalidity of the appointment. (2) The Court may exercise its powers under subsection (1) subject to such terms and conditions as it considers fit. Administrative Receivers Meaning of “administrative receiver”
142. (1) In this Act, “administrative receiver” means a receiver of the whole,
or substantially the whole, of the business, undertaking and assets of a company— (a) appointed out of court by or on behalf of the holder of a debenture or other instrument of the company secured by a floating charge, whether or not that debenture or other instrument is also secured by one or more other security interests; or (b) appointed by the Court as an administrative receiver under section 143. (2) Where 2 or more persons have the right, under different instruments, to appoint an administrative receiver— (a) each may appoint an administrative receiver, but only one administrative receiver may act in relation to the company at any time; and

LAW OF VIRGIN ISLANDS Insolvency Act 97 Revision Date: 1 Jan 2020 (b) the administrative receiver appointed on behalf of the person whose security interest ranks highest in priority, is entitled to act as administrative receiver. Appointment of administrative receiver by Court
143. (1) Where the Court appoints a receiver who would, had he or she been
appointed out of Court, be an administrative receiver, the Court may, in the order under which the receiver is appointed, specify that the receiver is an administrative receiver. (2) Where the Court appoints a receiver as an administrative receiver under subsection (1), unless and to the extent that the Court otherwise orders or that this Act provides to the contrary, the provisions of this Act that apply to administrative receivers apply to that receiver. (3) The Court shall not appoint a receiver as an administrative receiver if there is an administrative receiver acting in relation to the company. Powers of administrative receiver
144. (1) Notwithstanding any provision in the memorandum or articles, an
administrative receiver may, unless the debenture or other instrument by which he or she was appointed provides otherwise— (a) execute all documents necessary or incidental to the exercise of his or her powers in the name of and on behalf of the company in receivership; and (b) use the company’s seal. (2) Unless and to the extent that the debenture or other instrument by which an administrative receiver is appointed provides otherwise, the powers conferred on an administrative receiver of a company by the debenture or other instrument by which he or she was appointed include the powers specified in
Schedule 1.
(3) References in Schedule 1 to the assets of the company are to that part of the assets of the company in respect of which the receiver is appointed. (4) A person dealing with the administrative receiver of a company in good faith and for value is not concerned to enquire whether he or she is acting within his or her powers. Power to dispose of charged assets
145. (1) In this section, “relevant assets”, in relation to the administrative
receiver, means the assets of which he or she is or, but for the appointment of some other person as the receiver of part of the company’s assets, would be the receiver. (2) Where on an application by an administrative receiver, the Court is satisfied that the disposal, with or without other assets, of any relevant assets which are subject to a security interest would be likely to promote a more advantageous realisation of the company’s assets than would otherwise be effected, the Court may by order authorise the administrative receiver to dispose of the assets as if they were not subject to the other security interest.

98 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (3) Subsection (2) does not apply in the case of any security interest held by the person by or on whose behalf the administrative receiver was appointed, or of any security interest to which a security interest so held has priority. (4) It shall be a condition of an order made under subsection (2) that— (a) the net proceeds of the disposal; and (b) where those proceeds are less than such amount as may be determined by the Court to be the net amount which would be realised on the sale of the assets in the open market by a willing vendor (the open market value), such sums as may be required to make good the deficiency, shall be applied towards the sums secured by the security interest. (5) Where a condition imposed pursuant to subsection (4) relates to 2 or more security interests, that condition shall require the net proceeds of the disposal and, where paragraph (b) of that subsection applies, the sums mentioned in that paragraph to be applied towards discharging the sums secured by those security interests in the order of their priorities. (6) Where, following the disposal of assets under this section, subsection (4)(b) applies, the administrative receiver, or any person to whom sums are to be paid under that subsection, may apply to the Court for a review of the Court’s determination as to the open market value of the assets. (7) On an application made under subsection (6), the Court may make a fresh determination as to the open market value of the assets disposed of and subsections (4) and (5) shall apply with the new open market value substituted for the original open market value. (8) An application under subsection (6) shall be made— (a) in the case of the administrative receiver, within 14 days of the date of the disposal of the assets; or (b) in the case of a person other than the administrative receiver, within 14 days of the date that he or she is notified by the administrative receiver of the sale. (9) The administrative receiver shall file a copy of an order made under subsection (2) or subsection (7) with the Registrar within 14 days of the date of the order. (10) An administrative receiver who contravenes subsection (9) commits an offence. Statement of affairs
146. (1) In this section, “relevant person” has the meaning set out in section
275.
(2) An administrative receiver shall, as soon as practicable after his or her appointment, by notice, require one or more relevant persons to prepare and submit to him or her a statement of affairs of the company in administrative receivership.

LAW OF VIRGIN ISLANDS Insolvency Act 99 Revision Date: 1 Jan 2020 Report by administrative receiver
147. (1) An administrative receiver shall, within 3 months of his or her
appointment, prepare and file with the Registrar and, where appointed by the Court, with the Court, a report as to— (a) the events leading up to his or her appointment; (b) the disposal or proposed disposal by him or her of any assets of the company and the carrying on by him or her of any business of the company; (c) the amounts of principal and interest payable to the person by whom or on whose behalf he or she was appointed and the amounts payable to preferential creditors; (d) the amount, if any, likely to be available for the payment of other creditors; and (e) the persons who have submitted statements of affairs under
section 146, and containing such other information as may be
prescribed.
(Amended by Act 11 of 2004)
(2) A report prepared under subsection (1) shall include summaries of the statements of affairs submitted to him or her together with his or her comments thereon. (3) The administrative receiver shall, within 14 days of filing the report prepared under subsection (1) with the Registrar— (a) send a copy of the report to— (i) the company in receivership or, if it is in liquidation, its liquidator; and (ii) (Repealed by Act 11 of 2004) (iii) where the company is or has been a regulated person, to the Commission; (b) either send a copy of the report to each creditor of the company or publish a notice in the prescribed form stating the address of an office to which creditors of the company may write for a copy of the report and at which the report can be inspected during normal office hours; and (Amended by Act 11 of 2004) (c) call a meeting of unsecured creditors. (4) Where he or she is satisfied that the disclosure of information in a report prepared under this section would seriously prejudice the carrying out by him or her of his or her functions, the administrative receiver may omit such information from his or her report. (Amended by Act 11 of 2004) (5) Where a liquidator is appointed after the administrative receiver has sent a copy of his or her report to the company under subsection (3)(a), he or she shall within 7 days of the date of appointment of the liquidator send a copy of his or her report to the liquidator. (6) This section does not apply to a receiver appointed—

100 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (a) to act jointly with an existing administrative receiver; or (b) to act in place of an administrative receiver who has died or ceased to act, where subsections (1), (3) and (5) have been complied with by the existing administrative receiver or by his or her predecessor. (7) An administrative receiver who fails to comply with this section commits an offence. Application for permission not to call meeting of creditors
148. (1) An administrative receiver may apply to the Court for an order
permitting him or her not to call a meeting of creditors under section 147(3)(c) and, subject to subsection (2), the Court may make such an order subject to such terms as it considers appropriate. (2) The Court shall not make an order under subsection (1) unless— (a) the administrative receiver has stated in his or her report prepared under 147(1) his or her intention of applying for the order; (b) the report has been sent to the persons referred to in section 147(3)(a) not less than 14 days prior to the date of the hearing of the application; and (c) where he or she publishes a notice under section 147(3)(b), he or she stated his or her intention to apply for the order in that notice. (Inserted by Act 11 of 2004)
PART V
PROVISIONS APPLICABLE TO THE LIQUIDATION OF COMPANIES AND TO THE BANKRUPTCY OF INDIVIDUALS Interpretation
149. (1) For the purposes of this Part—
(a) “debtor” means a company in liquidation or an individual in bankruptcy; (b) “insolvency proceeding” means in the case of a company, its liquidation and in the case of an individual, his or her bankruptcy; and (c) “relevant time” means, in the case of a company, the commencement of its liquidation and, in the case of an individual, the commencement of his or her bankruptcy. (Amended by Act 11 of 2004) (2) In this Part, “company” includes a foreign company. (Inserted by Act 11 of 2004)

LAW OF VIRGIN ISLANDS Insolvency Act 101 Revision Date: 1 Jan 2020 Insolvency set-off
150. (1) Subject to section 435 where, before the relevant time, there have
been mutual credits, mutual debts or other mutual dealings between a debtor and a creditor claiming or intending to claim in the insolvency proceeding— (a) an account shall be taken of what is due from each party to the other in respect of those mutual credits, mutual debts or other mutual dealings, as at the relevant time; (b) the sum due from one party shall be set-off against the sums due from the other party; and (c) only the balance of the account, if any, may be claimed in the insolvency proceeding or is payable to the debtor, as the case may be. (Amended by Act 11 of 2004) (2) A creditor is not entitled to claim the benefit of a set-off under this
section if he or she had actual notice that the debtor was insolvent—
(a) at the time he or she gave credit to the debtor or received credit from the debtor; or (b) at the time he or she acquired any claim against the debtor or any
part of or interest in such a claim.
(3) For the purposes of subsection (2), “insolvent” has the meaning specified in section 8 with the deletion of subsection (1)(c)(i) of that section. (4) Where, before the relevant time, a creditor waives or agrees that he or she will not claim the benefit of a set-off under this section, that waiver or agreement takes effect notwithstanding subsection (1), except to the extent that a creditor who was not a party to the agreement, or has not agreed otherwise, is prejudiced. Validity of agreements to subordinate debt
151. Where, before the relevant time, a creditor acknowledges or agrees that,
in the event of a shortfall of assets, he or she will accept a lower priority in respect of a debt than that which he or she would otherwise have under this Act, that acknowledgement or agreement takes effect notwithstanding the provisions of this Act, except to the extent that a creditor of the debtor who was not a party to the agreement is prejudiced. Quantification of claims in liquidation and bankruptcy
152. (1) This section applies to the quantification of a claim in the liquidation
of a company or the bankruptcy of an individual.
(2) The amount of a claim shall be quantified as at the relevant time. (3) Where a claim is subject to a contingency or, for any other reason, the amount of the claim is not certain, the liquidator, or the bankruptcy trustee, shall— (a) agree an estimate of the value of the claim as at the relevant time; or

102 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (b) apply to the Court to determine the amount of the claim. (4) On an application by the liquidator or the bankruptcy trustee under subsection (3)(b), the Court may— (a) determine the amount of the claim itself; or (b) determine a method to be used by the liquidator or the trustee for calculating the amount of the claim. (5) In the case of rent and other payments of a periodic nature, a claim may include any amounts due and unpaid at the relevant time and where, at the relevant time, a payment was accruing due, the claim may include so much as would have fallen due at that time if the liability had been accruing from day to day. (6) A claim based on a liability that, at the relevant time, was not payable by the company until after the relevant time shall be discounted in accordance with the Rules. (7) Interest may be included in a claim as provided by section 153. Interest on claims
153. (1) Subject to sections 215 and 342, a claim in the liquidation of a
company or the bankruptcy of an individual shall not include an amount for interest in respect of a period after the relevant time. (2) If it was agreed between the debtor and a creditor that the debt on which the creditor’s claim is based would bear interest, the claim may include interest, at the agreed rate, up to the relevant time. (3) A claim made by a creditor other than one referred to in subsection (2) may include interest up to the relevant time if— (a) the debt on which the claim is based is due by virtue of a written instrument and was payable at a certain time before the relevant time; or (b) if, before the relevant time, the creditor made written demand on the debtor and the demand stipulated that interest would be payable on the debt from the date of the demand until payment of the debt. (4) The amount of interest that may be included in a claim under this
section is—
(a) in the case of a debt referred to in subsection (3)(a), interest at the court rate for the period from the date that the debt was payable to the relevant time; and (b) in the case of a debt referred to in subsection (3)(b), interest at the court rate for the period from the date of the written demand to the relevant time. Claim in currency other than dollars
154. (1) The amount of a claim based on a liability incurred or payable in a
currency other than dollars shall be converted into dollars at the rate of exchange prevailing at the relevant time.

LAW OF VIRGIN ISLANDS Insolvency Act 103 Revision Date: 1 Jan 2020 (2) For the purposes of subsection (1), the rate of exchange should be ascertained in such manner as may be prescribed. Statutory demand
155. (1) A creditor may make demand on a person for payment of a debt owed
by that person to him or her.
(2) A demand under subsection (1) shall— (a) be in respect of a debt that is due and payable at the time of the demand and that is not less than the prescribed minimum; (b) be in writing and shall specify the nature of the debt and its amount; (c) be dated and shall be signed by the creditor or by a person authorised to make demand on the creditor’s behalf; (d) require the person to pay the debt or to secure or compound for the debt to the reasonable satisfaction of the creditor within 21 days of the date of service of the demand on him or her or such longer period as may be prescribed; (Amended by Act 11 of 2004) (e) state that if the demand is not complied with, application may be made to the Court for the appointment of a liquidator or a bankruptcy trustee, as the case may be; (Amended by Act 11 of 2004) (f) set out the rights of the person to make application to set the demand aside under section 156; and (g) comply with and be served in accordance with the Rules. (3) If the creditor making demand under subsection (1) is a secured creditor in respect of the debt, the full amount of the debt shall be specified in the demand, but— (a) the demand shall specify the nature of the security interest, and the value which the creditor places on it at the date of the demand; and (b) the amount claimed— (i) shall be the full amount of the debt less the amount specified as the value of the security interest; and (ii) shall equal or exceed the prescribed minimum. Application to set aside statutory demand
156. (1) Where a person has been served with a statutory demand he or she
may apply to the Court to set it aside.
(2) An application under subsection (1) shall be made within 14 days of the date of service of the demand on him or her. (Amended by Act 11 of 2004) (3) The Court may not extend the time for making or serving an application to set aside a statutory demand.

104 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (4) Subject to an order of the Court under section 157, the time for compliance with the demand ceases to run as from the date upon which an application under subsection (1) is filed with the Court. (5) A person applying to set aside a statutory demand under this section shall give 7 days notice of the hearing to the creditor or, where a person is named in the demand as the person with whom communications in respect of the demand should be made, to that person. Hearing to set aside statutory demand
157. (1) The Court shall set aside a statutory demand if it is satisfied that—
(a) there is a substantial dispute as to whether— (i) the debt; or (ii) a part of the debt sufficient to reduce the undisputed debt to less than the prescribed minimum, is owing or due; (b) the person on whom the statutory demand was served has a reasonable prospect of establishing a set-off, counterclaim or cross claim in an amount equal to or greater than the amount specified in the demand less the prescribed minimum; or (c) the creditor holds a security interest in respect of the debt claimed and the value of the security interest is equal to or greater than the amount specified in the demand less the prescribed minimum. (2) The Court may set aside a statutory demand if it is satisfied that substantial injustice would otherwise be caused— (a) because of a defect in the demand, including a failure to comply with section 155(3); or (b) for some other reason. (3) Where the Court is satisfied that the security interest of a secured creditor has been under-valued in the statutory demand, the Court may require the creditor to amend the demand accordingly, but without prejudice to his or her right to make application for the appointment of a liquidator or for a bankruptcy order, as the case may be. (Amended by Act 11 of 2004) (4) If, on hearing an application to set aside a statutory demand, the Court is satisfied that there are no grounds for setting aside the statutory demand, it may extend the time for compliance with the statutory demand. (5) If the Court dismisses an application to set aside a statutory demand, it shall make an order authorising the creditor to make application for the appointment of a liquidator or for a bankruptcy order, as the case may be. (Amended by Act 11 of 2004) (6) Having considered the evidence before it on a hearing under this
section, the Court may either summarily determine the application or adjourn it
giving such directions as it considers fit.

LAW OF VIRGIN ISLANDS Insolvency Act 105 Revision Date: 1 Jan 2020
PART VI
LIQUIDATION
Preliminary
Application of this Part to Official Receiver
158. Where the Official Receiver is appointed as the liquidator or provisional
liquidator of a company, the provisions of this Act that apply to a liquidator apply to the Official Receiver, as liquidator, unless otherwise provided. Appointment of liquidator
159. (1) The Court may appoint the Official Receiver or an eligible insolvency
practitioner as liquidator—
(a) of a company, on an application under section 162; or (b) of a foreign company, on an application under section 163. (2) Subject to subsection (5) and section 161, the members of a company may, by a qualifying resolution, appoint an eligible insolvency practitioner as liquidator of the company. (Amended by Act 11 of 2004) (3) For the purposes of subsection (2), a resolution is a “qualifying resolution” if it is passed at a properly constituted meeting of the company by a majority of 75%, or if a higher majority is required by the memorandum or articles, by that higher majority, of the votes of those members who are present at the meeting and entitled to vote on the resolution. (4) The members of a foreign company may not appoint a liquidator under this Part and any resolution of the members of a foreign company that purports to appoint a liquidator under this Part is void and of no effect. (5) The members of a company that is a regulated person may not appoint a liquidator under subsection (2) unless at least 5 business days written notice of the resolution, or such shorter period of notice as the Commission may agree to accept in writing, has been given to the Commission. (Inserted by Act 11 of 2004) (6) A resolution passed in contravention of subsection (5) is void and of no effect. (Inserted by Act 11 of 2004) Duration of liquidation
160. The liquidation of a company commences at the time at which a liquidator
is appointed as provided in section 159 and continues until it is terminated in accordance with section 232 and, throughout this period, the company is referred to in this Act as “in liquidation”. Appointment of liquidator by members
161. (1) The members of a company may not appoint a liquidator of the
company if—
(a) an application to the Court to appoint a liquidator has been filed and served but not yet determined; (Amended by Act 11 of 2004) (b) a liquidator has been appointed by the Court; or

106 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (c) the person to be appointed liquidator has not consented in writing to his or her appointment, and a resolution to appoint a liquidator in the circumstances referred to in paragraphs (a), (b) or (c) is void and of no effect. (2) Where the members resolve to appoint a liquidator under section 159(2), the company shall, as soon as practicable, give the liquidator notice of his or her appointment. (3) The members of a company may not appoint the Official Receiver as liquidator of the company, and any resolution of the members that purports to do so is void and of no effect. (3A) The acts of a liquidator appointed in breach of section 161(1)(a) carried out in good faith are valid provided that he or she is not aware of the breach. (Inserted by Act 11 of 2004) (4) A company that contravenes subsection (2) commits an offence. Appointment of liquidator by Court
162. (1) The Court may, on application by a person specified in subsection (2),
appoint a liquidator of a company under section 159(1) if— (a) the company is insolvent; (b) the Court is of the opinion that it is just and equitable that a liquidator should be appointed; or (c) the Court is of the opinion that it is in the public interest for a liquidator to be appointed. (2) Subject to subsections (3), (4) and (5), an application under subsection (1) may be made by one or more of the following— (a) the company; (b) a creditor; (c) a member; (d) the supervisor of a creditors’ arrangement in respect of the company; (e) the Commission; (ea)the International Tax Authority; and (Inserted by Act 14 of 2019) (f) the Attorney General. (3) An application under subsection (1)(a) by a member may only be made with the leave of the Court, which shall not be granted unless the Court is satisfied that there is a prima facie case that the company is insolvent. (4) An application to appoint a liquidator under subsection (1)(c) may only be made by the Commission, the International Tax Authority or the Attorney General. (Amended by Act 14 of 2019) (5) The Commission may only make an application to appoint a liquidator under subsection (1)(c) if the company concerned is, or at any time has been, a regulated person or the company is carrying on, or at any time has carried on, unlicensed financial services business. (Amended by Act 19 of 2006)

LAW OF VIRGIN ISLANDS Insolvency Act 107 Revision Date: 1 Jan 2020 (5a) The International Tax Authority shall only make an application to appoint a liquidator under subsection (1)(c) if the company has been the subject of a determination by the International Tax Authority pursuant to section 10 of the Economic Substance (Companies and Limited Partnerships) Act to the effect that it has been carrying on a relevant activity in breach of the economic substance requirements or has been found to be in breach of the Mutual Legal Assistance (Tax Matters) Act; (Inserted by Act 14 of 2019) (6) Where a creditors arrangement has terminated, the person who, immediately before the termination of the arrangement, was the supervisor is treated as the supervisor for the purposes of this section. (Amended by Act 11 of 2004) (7) An applicant may, in his or her application under this section, propose an eligible insolvency practitioner as liquidator of the company. (8) Where an order is made under section 159(1) at a time when an arrangement is in force in respect of the company, the Court may appoint the supervisor of the arrangement as liquidator of the company. Appointment of liquidator of a foreign company
163. (1) The Court may, on application by a person specified in section 162(2),
appoint a liquidator of a foreign company under section 159(1) if the Court is satisfied that the company has a connection with the Virgin Islands and— (a) the company is insolvent; (b) the Court is of the opinion that it is just and equitable that a liquidator should be appointed; (c) the Court is of the opinion that it is in the public interest for a liquidator to be appointed; (d) the company is dissolved or has otherwise ceased to exist under or by virtue of the laws of the country in which it was last registered; (e) the company has ceased to carry on business; or (f) the company is carrying on business only for the purpose of winding up its affairs. (2) For the purposes of subsection (1), a foreign company has a connection with the Virgin Islands only if— (a) it has or appears to have assets in the Virgin Islands; (b) it is carrying on, or has carried on, business in the Virgin Islands; or (c) there is a reasonable prospect that the appointment of a liquidator of the company under this Part will benefit the creditors of the company. (3) An application for the appointment of a liquidator of a foreign company may be made— (a) notwithstanding that the company has been dissolved or has otherwise ceased to exist under or by virtue of the laws of any other country; and

108 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (b) whether or not the company is or has been registered under Part IX of the Companies Act, 1885 or Part XI of the BVI Business Companies Act. (Amended by Act 16 of 2004) (3A) An application to appoint a liquidator under subsection (1)(c) may only be made by the Commission, the International Tax Authority or the Attorney General. (Inserted by Act 11 of 2004 and amended by Act 14 of 2019) (3B) The Commission may only make an application to appoint a liquidator under subsection (1)(c) if the foreign company concerned is, or at any time has been, a regulated person or the company is carrying on, or at any time has carried on, unlicensed financial services business. (Inserted by Act 11 of 2004 and amended by Act 19 of 2006) (3C) The International Tax Authority shall only make an application to appoint a liquidator under subsection (1)(c) if the foreign company has been the subject of a determination by the International Tax Authority pursuant to section 10 of the Economic Substance (Companies and Limited Partnerships) Act to the effect that it has been carrying on a relevant activity in breach of the economic substance requirements. (Inserted by Act 14 of 2019) (4) Subject to the modifications and exceptions set out in Schedule 3, the provisions of this Part apply to an application to appoint a liquidator of a foreign company and to the liquidation of a foreign company. Withdrawal of application
164. An application for the appointment of a liquidator may not be withdrawn
except with the leave of the Court.
Advertisement of application
165. (1) Unless the Court otherwise orders, an application for the appointment
of a liquidator shall be advertised—
(a) if the company is the applicant, not less than 7 days before the date set for the application to be heard; or (b) if the company is not the applicant, not less than 7 days after service of the application on the company and not less than 7 days before the date set for the application to be heard. (2) If the application is not advertised in accordance with this section and the Rules, the Court may dismiss it. Substitution of applicant
166. (1) In the circumstances specified in subsection (2), the Court may, by
order, substitute as applicant in an application for the appointment of a liquidator, a creditor or member who is entitled to make such an application. (2) The Court may make a substitution order under subsection (1) where the original applicant is a member or creditor of the company and the Court considers it appropriate to do so— (a) because the applicant applies to withdraw the application or consents to it being dismissed;

LAW OF VIRGIN ISLANDS Insolvency Act 109 Revision Date: 1 Jan 2020 (b) because the Court considers that the application is not being diligently proceeded with; (c) where the applicant is not entitled to make the application; or (d) for any other reason. Court’s power on hearing of an application
167. (1) On the hearing of an application for the appointment of a liquidator,
the Court may—
(a) appoint a liquidator under section 159(1); (b) dismiss the application, even if a ground on which the Court could appoint a liquidator has been proved; (c) adjourn the hearing conditionally or unconditionally; or (d) make any interim order or other order that it considers fit. (2) The Court shall not refuse to appoint a liquidator of a company merely because— (a) the assets of the company are subject to a security interest in respect of an amount equal to or greater than the value or amount of the assets; (b) the company has no assets; or (c) where the applicant is a member, if the order were made, no assets of the company would be available for distribution among the members. (3) Where an application to appoint a liquidator is made by a member under section 162(1)(b), if the Court is of the opinion that— (a) the applicant is entitled to relief either by the appointment of a liquidator or by some other means; and (b) in the absence of any other remedy it would be just and equitable to appoint a liquidator, it shall appoint a liquidator unless it is also of the opinion that some other remedy is available to the applicant and that he or she is acting unreasonably in seeking to have a liquidator appointed instead of pursuing that other remedy. (4) An application for the appointment of a liquidator shall be dismissed if the company is in liquidation, a liquidator having been appointed by the members under section 159(2). (Inserted by Act 11 of 2004) Period within which application shall be determined
168. (1) Subject to subsection (2), an application for the appointment of a
liquidator shall be determined within 6 months after it is filed. (2) The Court may, upon such conditions as it considers fit, extend the period referred to in subsection (1) for one or more periods not exceeding 3 months each if— (a) it is satisfied that special circumstances justify the extension; and

110 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (b) the order extending the period is made before the expiry of that period or, if a previous order has been made under this subsection, that period as extended. (3) If an application is not determined within the period referred to in subsection (1) or within that period as extended, it is deemed to have been dismissed. (4) Section 496(1)(a) shall not apply to the time periods specified in this
section. (Inserted by Act 11 of 2004)
Expenses of an arrangement
169. Where a liquidator of a company is appointed and, at the date that the
application was filed, an arrangement was being supervised by a supervisor, the remuneration of the supervisor is a first charge on the assets of the company. Interim Relief Appointment of provisional liquidator
170. (1) Where an application for the appointment of a liquidator of a
company has been filed but not yet determined or withdrawn, the Court may, on application by a person specified in subsection (2), appoint the Official Receiver or an eligible insolvency practitioner as provisional liquidator of the company on the grounds specified in subsection (4). (2) Subject to subsection (3), an application under subsection (1) may be made by one or more of the following— (a) the applicant for the appointment of a liquidator; (b) the company; (c) a creditor; (d) a member; (e) the Commission; (ea)the International Tax Authority; and (Inserted by Act 14 of 2019) (f) any person who, under any other enactment, is entitled to apply for the appointment of a liquidator of the company. (3) An application under subsection (1) by a member may only be made with the leave of the Court. (4) The Court may appoint a provisional liquidator under subsection (1) if— (a) the company, in respect of which the application to appoint a liquidator has been made, consents; or (b) the Court is satisfied that the appointment of a provisional liquidator— (i) is necessary for the purpose of maintaining the value of assets owned or managed by the company; or

LAW OF VIRGIN ISLANDS Insolvency Act 111 Revision Date: 1 Jan 2020 (ii) is in the public interest. (5) The Court may appoint a provisional liquidator on such terms as it considers fit and may, as a condition precedent to the appointment, require the applicant to deposit at Court, or otherwise secure to the satisfaction of the Court, such sum as the Court considers reasonable to cover the remuneration of the provisional liquidator. (Amended by Act 11 of 2004) Rights and powers of provisional liquidator
171. (1) Subject to subsection (2), a provisional liquidator has the rights and
powers of a liquidator to the extent necessary to maintain the value of the assets owned or managed by the company or to carry out the functions for which he or she was appointed. (2) The Court may limit the powers of a provisional liquidator in such manner and at such times as it considers fit. Remuneration of provisional liquidator
172. (1) The provisional liquidator of a company is entitled to be paid such
remuneration as the Court may order applying the general principles specified in
section 432.
(2) Subject to subsections (4) and (5), the remuneration of the provisional liquidator is payable out of the assets of the company. (3) Where a liquidator is appointed, the remuneration of the provisional liquidator shall be paid in accordance with the prescribed priority. (4) If a liquidator is not appointed, the Court may order the applicant for the appointment of the provisional liquidator to pay or contribute to the remuneration and expenses of the provisional liquidator if it is satisfied that the applicant— (a) misled the Court when making the application; or (b) acted unreasonably in applying for the appointment of the provisional liquidator. (5) If the assets of the company are not sufficient to pay the remuneration of the provisional liquidator, the Court may order the shortfall, or part of the shortfall, to be paid by the applicant for the appointment of the provisional liquidator. (6) Unless the Court otherwise orders, where subsection (4)(a) applies, the provisional liquidator may retain out of the company’s assets such sums or assets as are, or may be, required for meeting his or her remuneration. Termination of appointment of provisional liquidator
173. (1) The Court may, on the application of the provisional liquidator or of
any person specified in section 170(2) or on its own motion, terminate the appointment of a provisional liquidator. (2) If the Court has not previously terminated the appointment of a provisional liquidator under subsection (1), it terminates on the determination by the Court of the application to appoint a liquidator.

112 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (3) On the termination of the appointment of a provisional liquidator, the Court may give such directions or make such order with respect to the accounts of his or her administration, or to any other matters, as it considers appropriate. Power to stay or restrain proceedings etc.
174. Where an application for the appointment of a liquidator of a company
has been filed but not yet determined or withdrawn, a person specified in section 170(2) may— (a) where any action or proceeding is pending against the company in the Court, the Court of Appeal or the Privy Council, apply to the Court, the Court of Appeal or the Privy Council, as the case may be, for a stay of the action or proceeding; and (b) where any action or proceeding is pending against the company in any other Virgin Islands court or tribunal in the Virgin Islands, apply to the Court for a stay of the action or proceeding. Effect of Liquidation Effect of liquidation
175. (1) Subject to subsection (2), with effect from the commencement of the
liquidation of a company—
(a) the liquidator has custody and control of the assets of the company; (b) the directors and other officers of the company remain in office, but they cease to have any powers, functions or duties other than those required or permitted under this Part or authorised by the liquidator; (Amended by Act 11 of 2004) (c) unless the Court otherwise orders, no person may— (i) commence or proceed with any action or proceeding against the company or in relation to its assets; or (ii) exercise or enforce, or continue to exercise or enforce any right or remedy over or against assets of the company; (d) unless the Court otherwise orders, no share in the company may be transferred; (e) no alteration may be made in the status of or to the rights or liabilities of a member, whether by an amendment of the memorandum or articles or otherwise; (f) no member may exercise any power under the memorandum or articles, or otherwise, except for the purposes of this Act; and (g) no amendment may be made to the memorandum or articles of the company. (2) Subsection (1) does not affect the right of a secured creditor to take possession of and realise or otherwise deal with assets of the company over which that creditor has a security interest.

LAW OF VIRGIN ISLANDS Insolvency Act 113 Revision Date: 1 Jan 2020 (3) Anything or matter done or purported to be done in contravention of subsection (1) is void and of no effect. Restriction on execution or attachment
176. (1) Subject to subsections (2) and (3), a creditor is not entitled to retain
the benefit of any execution process, distress or attachment over or against the assets of a company in liquidation unless the execution, process or attachment is completed before the first occurring of the commencement of the liquidation and— (a) where the liquidator was appointed by the members under section 159(2), the date upon which the creditor had notice of the calling of the meeting at which the resolution was proposed; or (b) where the liquidator was appointed by Court, the date upon which the application to appoint the liquidator was filed. (2) A person who, in good faith and for value, purchases assets of a company from an officer charged with an execution process acquires a good title as against the liquidator of the company. (3) The Court may set aside the rights conferred on a liquidator under subsection (1) to the extent and subject to such terms as it considers fit. (4) For the purposes of this section— (a) an execution or distraint against personal property is completed by seizure and sale; (b) an attachment of a debt is completed by the receipt of the debt; and (c) an execution against land is completed by sale, and in the case of an equitable interest, by the appointment of a receiver. Duties of officer in execution process
177. (1) Subject to subsection (6), where—
(a) assets of a company are taken in an execution process; and (b) before completion of the execution process the officer charged with the execution process receives notice that a liquidator or a provisional liquidator of a company has been appointed, he or she, on being required by the liquidator or provisional liquidator to do so, deliver or transfer the assets and any money received in satisfaction or partial satisfaction of the execution or paid to avoid a sale of the assets, to the liquidator. (2) The costs of the execution process are a first charge on any asset delivered or transferred to the liquidator under subsection (1) and the liquidator may sell all or some of the assets to satisfy that charge. (3) Subject to subsections (4) and (6), if in an execution process in respect of a judgement for a sum exceeding $500, assets of a company are sold or money is paid to avoid a sale, the officer charged with the execution process shall retain the proceeds of sale or the money paid for a period of 14 days. (4) If—

114 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (a) within the period of 14 days referred to in subsection (3), the officer has notice that— (i) an application for the appointment of a liquidator of the company has been filed; or (ii) a meeting of the members of the company has been called at which a resolution to appoint a liquidator is to be proposed; and (b) a liquidator is appointed in respect of the company, the officer shall deduct the costs of execution from the amount that he or she has retained under subsection (3) and pay the balance to the liquidator. (5) A liquidator to whom money has been paid under subsection (4) is entitled to retain it as against the execution creditor. (6) The Court may set aside the rights conferred on a liquidator under this
section to the extent and subject to such terms as it considers fit.
Notice of Appointment and First Meetings of Creditors Notice of appointment of liquidator
178. (1) The liquidator of a company shall, within 14 days of the date of his or
her appointment—
(a) advertise his or her appointment in accordance with the Rules; (Substituted by Act 11 of 2004) (b) file notice of his or her appointment with the Registrar; (c) serve notice of his or her appointment on the company in respect of which he or she was appointed; and (d) if he or she has been appointed in respect of a company that is or has been a regulated person, serve notice of his or her appointment on the Commission. (2) A liquidator who contravenes subsection (1) commits an offence. Liquidator to call first meeting of creditors
179. (1) Subject to section 183, the liquidator of a company shall call a
meeting of the creditors of the company (the first creditors’ meeting) to be held within 21 days of the date of his or her appointment— (a) by sending a notice of the meeting to every creditor not less than 7 days before the date upon which the meeting is to be held; and (b) by advertising the meeting. (Amended by Act 11 of 2004) (2) During the period before the date of the first creditors’ meeting, the liquidator shall, at the request of a creditor, furnish that creditor with— (a) a list of the creditors of the company known to the liquidator; and

LAW OF VIRGIN ISLANDS Insolvency Act 115 Revision Date: 1 Jan 2020 (b) such other information concerning the affairs of the company as the creditor may reasonably require and that the liquidator is reasonably able to provide. (3) The liquidator shall attend the first creditors meeting and, if appointed by the members, shall report to the meeting on any exercise by him or her of his or her powers since his or her appointment. (4) At the first creditors’ meeting, the creditors may— (a) in the case of a liquidator appointed by the members, appoint another liquidator in his or her place; or (b) in the case of a liquidator appointed by the Court, resolve to make application to the Court for the appointment of another liquidator in his or her place; and (c) in either case, appoint a creditors’ committee. (5) A liquidator who contravenes subsections (1), (2) or (3) commits an offence. Application to Court by members
180. Where at a meeting held under section 179 the creditors appoint a
liquidator in the place of the liquidator appointed by the members, a director, member or creditor of the company may apply to the Court for an order that— (a) the person appointed by the members is appointed liquidator; or (b) some other insolvency practitioner is appointed as liquidator, in either case, instead of or jointly with the liquidator appointed by the creditors. Application of sections 178 and 179
181. (1) Subject to subsection (2), sections 178 and 179 do not apply to a
liquidator appointed to act—
(a) with an existing liquidator; or
(b) in place of a liquidator who has died or otherwise ceased to act. (2) Where the first liquidator of a company dies or ceases to act before sections 178 and 179 have been fully complied with, those sections apply to his or her successor and any continuing liquidator until the sections have been fully complied with. Restrictions on powers of liquidator appointed by members
182. Notwithstanding section 186, in the case of a liquidator appointed by the
members of a company, during the period before the holding of the first creditors’ meeting called under section 179, the powers of the liquidator are limited to— (a) taking into his or her custody and control all the assets to which the company is or appears to be entitled; (b) disposing of perishable goods and other assets the value of which is likely to diminish if they are not immediately disposed of;

116 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (c) doing all such things as may be necessary to protect the company’s assets; and (d) exercising such other of the powers conferred on a liquidator by
section 186 as the Court may, on his or her application, sanction.
Court appointed liquidator may dispense with creditors’ meeting
183. A liquidator appointed by the Court is not required to call a meeting of
creditors under section 179 if—
(a) he or she considers that, having regard to the assets and liabilities of the company, the likely result of the liquidation of the company and any other relevant matters that it is not necessary for a meeting to be held; (b) he or she gives notice to the creditors stating— (i) that he or she does not consider it necessary for a meeting to be held; (ii) the reasons for his or her view; and (iii) that a meeting will not be called unless 10% in value of the creditors give written notice to the liquidator within 10 days of receiving the notice, that they require a meeting to be called; and (c) no notice requiring a meeting to be held is received by him or her. Liquidators Status of liquidator
184. (1) In performing his or her functions and undertaking his or her duties
under this Act, a liquidator, whether appointed by resolution of the members or by the Court, acts as an officer of the Court. (2) A liquidator is the agent of the company in liquidation. General duties of liquidator
185. (1) The principal duties of a liquidator of a company are—
(a) to take possession of, protect and realise the assets of the company; (b) to distribute the assets or the proceeds of realisation of the assets in accordance with this Act; and (c) if there are surplus assets remaining, to distribute them, or the proceeds of realisation of the surplus assets, in accordance with this Act. (2) The liquidator shall, subject to this Act and the Rules, use his or her own discretion in undertaking his or her duties.

LAW OF VIRGIN ISLANDS Insolvency Act 117 Revision Date: 1 Jan 2020 (2A) If it appears to the liquidator that the company has carried on unlicensed financial services business, he or she shall as soon as reasonably practicable report the matter to the Commission. (Inserted by Act 11 of 2004) (2B) Where the liquidator makes a report to the Commission under subsection (2A) he or she shall— (a) send to the Commission a copy of every notice or other document that he or she is required under this Part to send to a creditor or the Court; and (b) notify the Commission of any application made to the Court in or in connection with the liquidation. (Inserted by Act 11 of 2004) (3) A liquidator also has the other duties imposed by this Act and the Rules and such duties as may be imposed by the Court. General powers of liquidator
186. (1) A liquidator of a company has the powers necessary to carry out the
functions and duties of a liquidator under this Act and the powers conferred on him or her by this Act. (2) Without limiting subsection (1), a liquidator has the powers specified in Schedule 2. (3) The Court may provide that certain powers may only be exercised with the sanction of the Court— (a) where the liquidator is appointed by the Court, on his or her appointment or subsequently; or (b) where the liquidator is appointed by the members, at any time. (4) Where a liquidator disposes of any assets of the company to a person connected with the company, he or she shall notify the creditors’ committee, if any, of such disposition. (5) The liquidator of a company, whether or not appointed by the Court, may at any time apply to the Court for directions in relation to a particular matter arising in the liquidation. (6) The acts of a liquidator of a company are valid notwithstanding any defect in his or her nomination, appointment or qualifications. (Inserted by Act 11 of 2004) Removal of liquidator
187. (1) The Court may, on application by a person specified in subsection (2)
or on its own motion, remove the liquidator of a company from office if— (a) the liquidator— (i) is not eligible to act as an insolvency practitioner in relation to the company; (ii) breaches any duty or obligation imposed on him or her by or owed by him or her under this Act, the Rules or the Regulations made under section 486 or, in his or her capacity

118 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS as liquidator, under any other enactment or law in the Virgin Islands; or (Amended by Act 11 of 2004) (iii) fails to comply with any direction or order of the Court made in relation to the liquidation of the company; or (b) the Court is satisfied that— (i) the liquidator’s conduct of the liquidation is below the standard that may be expected of a reasonably competent liquidator; (ii) the liquidator has an interest that conflicts with his or her role as liquidator; or (iii) that for some other reason he or she should be removed as liquidator. (2) An application to the Court to remove the liquidator of a company may be made by— (a) the creditors’ committee; (b) a creditor or member of the company; or (c) the Official Receiver. (3) Where the Court removes a liquidator from office under this section— (a) if, following his or her removal, there is at least one liquidator remaining in office, the Court may appoint an eligible insolvency practitioner as liquidator in his or her place; or (b) if the liquidator removed was the sole liquidator of the company, the Court shall appoint the Official Receiver or an eligible insolvency practitioner as liquidator in his or her place. (Amended by Act 11 of 2004) (4) On the hearing of an application under this section, the Court may make any interim or other order it considers fit. Resignation of liquidator
188. (1) A liquidator of a company—
(a) shall resign if he or she is no longer eligible to act as an insolvency practitioner in relation to the company; but (b) otherwise may only resign in accordance with this section. (2) Where a liquidator resigns under subsection (1)(a), he or she shall send a notice of his or her resignation to the creditors of the company to the Registrar and to the Official Receiver and, if he or she was appointed by the Court, to the Court and his or her resignation takes effect from the date that the notice is received by the Official Receiver. (Amended by Act 11 of 2004) (3) A liquidator may resign in accordance with subsection (5)— (a) if he or she intends to cease to be in practice as an insolvency practitioner;

LAW OF VIRGIN ISLANDS Insolvency Act 119 Revision Date: 1 Jan 2020 (b) if there is some conflict of interest or change of personal circumstances that precludes or makes impracticable the further discharge by him or her of his or her duties; or (c) on the grounds of ill health. (4) Notwithstanding subsection (3), where joint liquidators are appointed in respect of a company, one or more of the joint liquidators may resign in accordance with subsection (5) if— (a) all the joint liquidators are of the opinion that it is no longer necessary or expedient for the resigning liquidator or liquidators to continue in office; and (b) at least one of them will remain in office. (5) Where the liquidator of a company intends to resign on one of the grounds referred to in subsection (3) or under subsection (4), he or she shall call a meeting of creditors for the purpose of accepting his or her resignation as liquidator. (6) If the creditors resolve to accept the resignation of a liquidator, they may appoint an eligible insolvency practitioner as liquidator in his or her place. (Amended by Act 11 of 2004) (6A) If the creditors refuse or fail to accept the resignation of the liquidator, he or she may apply to the Court for leave to resign in accordance with the Rules. (Inserted by Act 11 of 2004) (7) This section does not apply to the Official Receiver when acting as the liquidator of a company. Appointment of replacement liquidator
189. (1) Where the liquidator of a company dies or resigns under section 188
and no liquidator is appointed in his or her place, the Court, on the application of a person specified in subsection (2) or on its own motion— (a) if there is at least one liquidator remaining in place, may appoint an eligible insolvency practitioner as liquidator in his or her place; or (b) if the liquidator who has died or resigned was the sole liquidator of the company, shall appoint the Official Receiver or an eligible insolvency practitioner in his or her place. (Substituted by Act 11 of 2004) (2) An application under subsection (1) may be made— (a) by any continuing liquidator; (b) by the creditors’ committee, if any; or (c) by the Official Receiver. (3) Where the Official Receiver is the liquidator of a company, an eligible insolvency practitioner may be appointed in his or her place— (a) on the application of the Official Receiver, by the Court; or

120 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (b) with the consent of the Official Receiver, by resolution of the creditors at a meeting called by the Official Receiver for that purpose. (Inserted by Act 11 of 2004) (4) An application may be made under subsection (3) notwithstanding that the Court has refused to make an appointment on a previous application by the Official Receiver. (Inserted by Act 11 of 2004) Remuneration of liquidator
190. The remuneration payable to the liquidator of a company shall be fixed
applying the principles set out in section 432.
Notification of liquidation
191. (1) Where a company is in liquidation, every document of a type
specified in subsection (2) shall—
(a) state that the company is in liquidation; and (b) specify the name of the liquidator. (2) Subsection (1) applies to— (a) every public document issued by or on behalf of the company; (b) every public document issued by or on behalf of the liquidator of the company or a receiver of the assets of that company on which, in either case, the name of the company appears. (3) If subsection (1) is contravened the company, and each officer, receiver or liquidator of the company who causes, permits or acquiesces in the contravention, commits an offence. Vesting of assets in liquidator
192. (1) On the application of the liquidator of a company, the Court may
order that all or any part of the assets of the company, or held by trustees on its behalf, shall vest in the liquidator from the date of the order. (2) On the making of an order under subsection (1), the assets covered by the order vest in the liquidator by his or her official name. (3) The liquidator of a company may, after giving such indemnity, if any, as the Court may direct, bring or defend in his or her official name any action or other legal proceeding which relates to the vested assets or which it is necessary to bring or defend for the purposes of liquidating the company and recovering its assets. Members Settlement of list of members
193. (1) Subject to subsection (7), the liquidator of a company shall, as soon as
practicable after his or her appointment, settle a list of the members of the company containing the information and in the form prescribed. (Amended by Act 11 of 2004)

LAW OF VIRGIN ISLANDS Insolvency Act 121 Revision Date: 1 Jan 2020 (2) Forthwith after settling the list of members, the liquidator shall give notice to every person included in the list that he or she has done so in accordance with the Rules. (3) If a person objects to any entry in, or exclusion from, the list of members as settled by the liquidator which is not accepted by the liquidator, he or she may apply to the Court for an order removing the entry to which he or she objects or, as the case may be, modifying the entry. (4) An application under subsection (3) shall be made within 21 days of the service on the applicant of the liquidator's notice declining to accept the objection. (5) The liquidator of a company is not personally liable for the costs incurred by a person in an application under subsection (3) unless the Court makes an order to that effect. (6) The liquidator may from time to time vary or add to the list of members as previously settled by him or her and any variation or addition is subject, as regards any person affected, to the provisions of the Act and the Rules applicable to the settling of the list. (7) The liquidator is not required to settle a list of members under this
section if it appears to him or her that it will not be necessary to require any
member to contribute to the assets of the company or to adjust the rights of members. (Inserted by Act 11 of 2004) Rectification of register of members
194. (1) If it appears to the liquidator of a company that the register of
members of the company should be rectified, he or she may apply to the Court for an order under this section. (2) On an application under subsection (1), the Court may rectify the register of members of the company. Liability of members limited
195. (1) Unless the memorandum of a company provides that the liability of a
member is unlimited, the liability of a member to contribute to the assets of a company in liquidation for the payment of its liabilities, for the expenses of the liquidation and for the adjustment of the rights of the members between themselves is limited to— (a) any amount unpaid on a share held by the member, including any liability for calls; and (b) any liability expressly provided for in the memorandum or articles, including such contribution as the member of a company limited by guarantee, or by shares and guarantee, may have undertaken to make in the event of the company being wound up. (2) Subsection (1) does not affect— (a) any liability of the member to pay or repay monies to the company imposed by a provision of this Act or the BVI Business Companies Act; or (Amended by Act 16 of 2004)

122 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (b) any liability of a member to the company under a contract, including a contract for the issue of shares, or for any tort, breach of fiduciary duty or other actionable wrong committed by the member. Liability of past members
196. (1) For the purposes of this section, a “past member” of a company is a
person who ceased to be a member of the company at any time during the period of one year before the commencement of the liquidation of the company. (2) Unless the Court is satisfied that the members of a company are able to discharge the liabilities set out in 195(1), a past member of a company in liquidation is liable to contribute to the assets of the company for the purposes specified in that subsection to the same extent as a member. (3) Notwithstanding subsection (2), a past member is not liable to contribute to the assets of the company in respect of any liability of the company contracted after he or she ceased to be a member. Dividends payable to member
197. A member, and a past member, of a company may not claim in the
liquidation of the company for a sum due to him or her in his or her character as a member, whether by way of dividend, profits, redemption proceeds or otherwise, but such sum is to be taken into account for the purposes of the final adjustment of the rights of members and, if appropriate, past members between themselves. Liability where limited company becomes unlimited company
198. (1) This section applies where an unlimited company in liquidation was at
some former time registered as a limited company.
(2) A person who ceased to be a member of a company before the company became registered as an unlimited company, and has not since become a member of the company, is liable to contribute to the assets of the company only to the extent that he or she would have been liable had the company remained registered as a limited company. Liability where unlimited company becomes limited company
199. (1) This section applies where a limited company in liquidation was at
some former time registered as an unlimited company.
(2) Notwithstanding section 196, if a company referred to in subsection (1) goes into liquidation within the period of one year from the date on which it was registered as a limited company, a person who was a member of the company at the date of its registration as a limited company is liable, without limit, to contribute to the assets of the company in respect of liabilities contracted before that time.

LAW OF VIRGIN ISLANDS Insolvency Act 123 Revision Date: 1 Jan 2020 Liability of personal representative
200. The personal representatives of a member or past member who has died
are liable to contribute out of his or her estate to the assets of the company under sections 195, 196, 198 and 199 to the same extent as the member. Effect of member or past member becoming bankrupt
201. The liquidator of a company is entitled to submit a claim in the
bankruptcy or liquidation of any member or past member of the company in respect of any contribution that the member or past member is required to make under sections 195, 196, 198 and 199. Status of personal representatives or bankruptcy trustee
202. The personal representatives and the bankruptcy trustee of a member or
past member of a company in liquidation are entitled to make any application to Court, or take any such other action, as could be made or taken by the member or past member. (Amended by Act 11 of 2004) Insurance and other contracts not affected
203. Nothing in this Act invalidates any provision contained in a policy of
insurance or other contract whereby the liability of individual members on the policy or contract is restricted or whereby the funds of the company are alone made liable in respect of the policy or contract. Power of liquidator to enforce liability of member or past member
204. (1) The liquidator of a company may—
(a) if a member is liable to calls, make calls on that member; and (b) if a member or past member is liable to the company, as a member, require him or her, by notice in writing, to discharge that liability. (2) A call made under subsection (1)(a) shall be in writing and shall specify the amount of, or balance due in respect of, the call. (3) The liability of a member under subsection (1) includes a liability of the estate of the person he or she represents. (4) In the case of an unlimited company, a member may set-off against a liability under subsection (1)(b) any money due to him or her or to the estate which he or she represents, from the company on any independent dealing or contract with the company, but not any money due to him or her as a member of the company in respect of any dividend or profit. (5) The liquidator may enforce the liability of a member under subsection (1) only if that member is on the list of members settled by him or her under
section 193.
Summary remedy against members and past members
205. (1) The liquidator may apply to the Court for an order under this section
if—

124 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (a) a member of a company fails to comply with a call made under
section 204(1)(a); or
(b) a member or past member fails to satisfy a liability when required to do so under 204(1)(b). (2) On an application under subsection (1), the Court may order a member or past member to pay to the company any money due from him or her, or due from the estate of the person who he or she represents in accordance with
section 204(1).
(3) In the case of any company, whether limited or unlimited, when all the creditors are paid in full, together with interest at the official rate, any money due on any account whatever to a member from the company may be allowed to him or her by way of set-off against any subsequent call. Order under section 205 to be conclusive evidence
206. An order made against a member under section 205 is, subject to any right
of appeal, conclusive evidence that the money, if any, ordered to be paid is due. Distribution of assets of company
207. (1) Unless and to the extent that this Act or any other enactment provides
otherwise, the assets of a company in liquidation shall be applied— (a) in paying, in priority to all other claims, the costs and expenses properly incurred in the liquidation in accordance with the prescribed priority; (b) after payment of the costs and expenses of the liquidation, in paying the preferential claims admitted by the liquidator in accordance with the provisions for the payment of preferential claims prescribed; (c) after payment of the preferential claims, in paying all other claims admitted by the liquidator; and (d) after paying all admitted claims, in paying any interest payable under section 215. (2) Subject to section 151, the claims referred to in subsection (1)(c) rank equally between themselves if the assets of the company are insufficient to meet the claims in full, they shall be paid rateably. (3) Any surplus assets remaining after payment of the costs, expenses and claims referred to in subsection (1) shall be distributed to the members in accordance with their rights and interests in the company. (4) For the purposes of this Act, assets held by a company in liquidation on trust for another person are not assets of the company. Claims Claims having priority over floating charges
208. So far as the assets of a company in liquidation available for payment of
the claims of unsecured creditors are insufficient to pay—

LAW OF VIRGIN ISLANDS Insolvency Act 125 Revision Date: 1 Jan 2020 (a) the costs and expenses of the liquidation in accordance with the prescribed priority, and (b) the preferential creditors, those costs, expenses and claims have priority over the claims of chargees in respect of assets that are subject to a floating charge created by the company and shall be paid accordingly out of those assets. Claims by unsecured creditors
209. (1) An unsecured creditor may make a claim against a company in
liquidation by submitting to the liquidator a written claim, signed by him or her or on his or her behalf. (2) The liquidator may require an unsecured creditor who intends to submit, or who has submitted, a claim under subsection (1)— (a) to verify his or her claim by affidavit; (b) to provide further particulars of his or her claim; or (c) to provide him or her with documentary or other evidence to substantiate the claim. (3) Subject to subsection (6A), as soon as reasonably practicable after receiving a claim under subsection (1) from a creditor who has complied with any requirements that the liquidator may have imposed under subsection (2), the liquidator shall either admit or reject the claim in whole or in part. (Inserted by Act 11 of 2004) (4) If the liquidator rejects the claim, whether in whole or in part, he or she shall as soon as practicable provide the creditor with a notice of rejection in which the reasons for the rejection of the claim shall be specified. (5) Unless the Court otherwise orders, a creditor shall bear the costs of making a claim under this section, including the costs of complying with any requirements imposed by the liquidator under subsection (2). (6) The liquidator shall not admit a claim against the company unless it has been made in accordance with this section. (6A) The liquidator is not required to admit or reject claims under subsection (3) at any time when it appears to him or her that the company has insufficient assets to enable a distribution to be made to unsecured creditors. (Inserted by Act 11 of 2004) (7) A person who makes or authorises the making of a claim under this
section knowing that—
(a) the claim is false or misleading in a material matter; or (b) a material fact or matter has been omitted from the claim, commits an offence. Variation, withdrawal and expunging of claims
210. (1) A claim made under section 209 may—
(a) be amended or withdrawn by the creditor at any time before the liquidator has admitted it; and

126 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (b) be amended or withdrawn by agreement between the creditor and the liquidator at any time after the liquidator has admitted it. (2) The Court, on the application of the liquidator or, where the liquidator declines to make application under this subsection, a creditor, may expunge or amend an admitted claim if it is satisfied that the claim should not have been admitted or should be reduced. Claims by secured creditors
211. (1) A secured creditor may—
(a) value the assets subject to the security interest and claim in the liquidation of a company as an unsecured creditor for the balance of his or her debt; or (b) surrender his or her security interest to the liquidator for the general benefit of creditors and claim in the liquidation as an unsecured creditor for the whole of his or her debt, but he or she is not obliged to do either. (2) A secured creditor may, at any time apply to the liquidator to amend the value that he or she placed on the security interest in his or her claim. (3) If, on receiving an application under subsection (2), the liquidator is satisfied that— (a) the value placed on the security interest was an estimate made in good faith on a mistaken basis; or (b) the value of the security interest has subsequently changed, he or she may permit the secured creditor to amend the value that he or she places on the security interest. (4) If the liquidator of a company is dissatisfied with the value placed on a security interest by a secured creditor, whether under subsection (1)(a) or on an amendment under subsection (3), he or she may require the assets comprised in the security interest to be offered for sale. (5) A sale under subsection (4) is to be on such terms and conditions as are agreed by the secured creditor and the liquidator or, in default, as the Court determines. (6) If assets are offered for sale by public auction, both the secured creditor and the liquidator are entitled to bid for and purchase them. Redemption of security interest by liquidator
212. (1) Where a secured creditor has claimed in the liquidation of a company
under section 211(1)(a), the liquidator may at any time give notice to the creditor that he or she proposes at the expiration of 28 days from the date of the notice to redeem the security interest at the value placed on it by the creditor. (2) A secured creditor who receives a notice under subsection (1) may, within 21 days of the date of the notice, apply to the liquidator to revise the value that he or she places on the security interest in accordance with section 211(2).

LAW OF VIRGIN ISLANDS Insolvency Act 127 Revision Date: 1 Jan 2020 (3) At the expiration of 28 days from the date of the notice under subsection (1), the liquidator may redeem the security interest at the value placed on it by the creditor unless— (a) the secured creditor has applied to the liquidator to amend the value that he or she places on the security interest and that application has not been determined; or (b) the secured creditor has appealed to the Court against the refusal of the liquidator to permit him or her to amend the value that he or she places on his or her security interest, and that appeal has not been determined. (4) Where, subsequent to a notice to redeem issued under subsection (1), the value placed by the secured creditor on his or her security interest is amended, whether with the consent of the liquidator or on appeal to the Court, the liquidator may only redeem the security interest at the new value. (5) A secured creditor may, by serving a notice to elect on the liquidator, require him or her to elect whether or not to exercise his or her power to redeem under this section. (6) Where a notice to elect is served on a liquidator under subsection (5), he or she is not entitled to redeem the security interest unless he or she does so within 6 months of the date of service of the notice on him or her or within such extended period as the Court may allow. Realisation of security interest by secured creditor
213. (1) Where a secured creditor realises his or her security interest and there
is a surplus remaining from the net amount realised after satisfaction of the debt secured, he or she shall account to the liquidator for the surplus, after making any proper payments to the holder of any other security interest over the assets subject to that charge. (2) Where a secured creditor realises his or her security interest and the net amount realised is not sufficient to satisfy the liability secured— (a) if the creditor has previously valued his or her security interest and claimed in the liquidation for the balance under section 211(1)(a), the net amount realised is substituted for the value previously placed by the creditor on the security interest; or (b) in any other case, the creditor may claim in the liquidation as an unsecured creditor for the balance of the secured liability. (3) For the purposes of this section, the secured liability includes contractual interest payable to the secured creditor on the liability up to the time of its satisfaction. Surrender for non-disclosure
214. (1) Subject to subsection (2), if a secured creditor omits to disclose his or
her security interest when submitting a claim in the liquidation of a company, he or she shall surrender his or her security interest for the general benefit of the creditors.

128 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (2) The Court may, on application by a secured creditor who is required to surrender his or her security interest under subsection (1), if it is satisfied that the omission was inadvertent or the result of an honest mistake by order direct— (a) that he or she is not required to surrender his or her security interest; and (b) that he or she values his or her security interest and amends his or her claim accordingly. Interest after commencement of liquidation
215. (1) Interest is payable on any claim in the liquidation of a company in
respect of the period after the commencement of the liquidation in accordance with this section. (2) Any surplus remaining after the payment of all claims in the liquidation of a company shall, before being applied for any other purpose, be applied in paying interest on those claims in respect of the periods during which they have been unpaid since the commencement of the liquidation. (3) Subject to section 151, all interest payable under this section ranks equally, whether or not the claims on which it is payable rank equally and if the assets of the company are insufficient to meet the claims in full, they shall be paid rateably. (4) The rate of interest payable under this section is the greater of— (a) the court rate; and (b) the rate that would be applicable to the claim if a liquidator of the company had not been appointed. Distributions Power to exclude creditors not claiming in time
216. (1) Where the liquidator of a company has sufficient funds to make a
distribution, he or she shall, subject to the retention of such sums as may be necessary for his or her remuneration and the other costs and expenses of the liquidation, by written notice sent to the creditors of the company, fix a date on or before which creditors shall submit their claims to him or her. (Amended by Act 11 of 2004) (2) Where the liquidator sends a notice to creditors under subsection (1), a creditor who does not submit a claim on or before the date specified in the notice is excluded from the benefit of any distribution on or after that date that is made before he or she submits his or her claim. (Amended by Act 11 of 2004) (3) Where the liquidator makes more than one distribution, subsections (1) and (2) apply to each distribution. (Inserted by Act 11 0f 2004) Disclaimer Liquidator may disclaim onerous property
217. (1) For the purposes of this section, “onerous property” means—

LAW OF VIRGIN ISLANDS Insolvency Act 129 Revision Date: 1 Jan 2020 (a) an unprofitable contract; or (b) assets of the company which are unsaleable or not readily saleable, or which may give rise to a liability to pay money or perform an onerous act. (2) Subject to section 219, the liquidator of a company may, by filing a notice of disclaimer with the Court, disclaim any onerous property of the company even though he or she has taken possession of it, tried to sell or assign it or otherwise exercised rights of ownership in relation to it. (3) A liquidator who disclaims onerous property shall, within 14 days of the date on which the disclaimer notice is filed, give notice to every person whose rights are, to the knowledge of the liquidator, affected by the disclaimer. (4) A liquidator who contravenes subsection (3) commits an offence. When disclaimer takes effect
218. (1) Subject to subsection (2), a disclaimer takes effect on the date when
the notice of disclaimer is filed at Court.
(2) The disclaimer of property of a leasehold nature does not take effect unless a copy of the disclaimer notice has been given, so far as the liquidator is aware of their addresses, to every person claiming under the company as underlessee or mortgagee and either— (a) no application for a vesting order is made under section 221 with respect to that property before the end of a period of 14 days beginning with the day on which the last notice under this subsection was given; or (b) where such an application is made, the Court directs that the disclaimer shall take effect. (3) Where the Court gives a direction under subsection (2)(b), it may also, instead of or in addition to any order it makes under section 221, make such orders with respect to fixtures, tenant’s improvements and other matters arising out of the lease as it considers fit. Notice to liquidator to elect whether to disclaim
219. (1) A person interested in property or whose rights would be effected by
the disclaimer of property may, by serving a notice to elect on the liquidator, require him or her to elect whether or not to disclaim the property. (2) Where a notice to elect is served on a liquidator, he or she is not entitled to disclaim the property under section 217 unless he or she does so within 28 days of the date of service of the notice on him or her or within such extended period as the Court may allow. Effect of disclaimer
220. (1) A disclaimer of onerous property under section 217—
(a) operates so as to determine, with effect from the date of the disclaimer, the rights, interests and liabilities of the company in or in respect of the property disclaimed; but

130 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (b) except so far as is necessary to release the company from liability, does not affect the rights or liabilities of any other person. (2) A person suffering loss or damage as a result of a disclaimer of onerous property under section 217 may claim in the liquidation of the company as a creditor for the amount of the loss or damage. Vesting orders and orders for delivery
221. (1) Subject to section 222, if a liquidator disclaims onerous property
under section 217, the Court may make an order under subsection (2) on the application of— (a) a person who claims an interest in the disclaimed property; or (b) a person who is under a liability in respect of the disclaimed property, that has not been discharged by the disclaimer. (2) On an application under subsection (1), the Court may, on such terms as it considers fit, order that the disclaimed property be vested in or delivered to— (a) a person entitled to the property; (b) a person under a liability in respect of the property that has not been discharged by the disclaimer; or (c)a trustee for a person referred to in paragraph (a) or (b). (3) The Court shall not make an order in respect of a person specified in subsection (2)(b), or in respect of a trustee of such a person, unless it appears to the Court that it would be fair to do so for the purpose of compensating the person subject to the liability in respect of the disclaimer. (4) The effect of any order under this section shall be taken into account in assessing the extent of the loss or damage suffered by a person for the purposes of section 220(2). (5) Subject to subsection (6), where a vesting order is made under this
section vesting property in a person, the property vests immediately without any
conveyance, transfer or assignment.
(6) Where another Virgin Islands enactment— (a) requires the transfer of property vested by an order under this
section to be registered, and
(b) that enactment enables the order to be registered, on the making of a vesting order, the property vests in equity but does not vest at law until the registration requirements of the enactment have been complied with. Vesting orders in respect of leases
222. (1) Where the Court makes an order under section 221 vesting property
of a leasehold nature in a person claiming under the company in liquidation as an underlessee or a mortgagee, the vesting order shall be made on terms that make that person subject—

LAW OF VIRGIN ISLANDS Insolvency Act 131 Revision Date: 1 Jan 2020 (a) to the same liabilities and obligations as the company was subject to under the lease at the commencement of the liquidation; or (b) to the same liabilities and obligations as that person would have been subject to if the lease had been assigned to him or her at the commencement of the liquidation. (2) Where the property vested by an order under section 221 relates to only part of the property comprised in a lease, subsection (1) applies as if the lease comprised the property subject to the vesting order. (3) Where no underlessee or mortgagee is willing to accept a vesting order made subject to subsection (1), the Court, by order— (a) may vest the property in any person who is liable, whether personally or in a representative capacity and whether alone or jointly with the company, to perform the lessee’s covenants in the lease; and (b) where a vesting order is made under paragraph (a), may vest the property free from all estates, encumbrances and interests created by the company. (4) Where an underlessee or a mortgagee declines to accept a vesting order made subject to subsection (1), he or she is excluded from all interest in the property. Land subject to rentcharge
223. Where land subject to a rentcharge is disclaimed and that land vests by
operation of law in any person, including the Crown, that person and his successors in title are not subject to any personal liability in respect of any sums becoming due under the rentcharge except sums becoming due after he or she, or some person claiming title under or through him or her, has taken possession or control of the land or has entered into occupation of it. Disclaimer presumed valid
224. Unless it is proved that a liquidator has breached his or her duty to give
notice under section 217(3) or that he or she has otherwise breached his or her duties under this Act or the Rules with regard to disclaimer, a disclaimer of property by the liquidator is presumed to be valid and effective. Investigation of Assets and Affairs of Company Statement of affairs
225. (1) In this section, “relevant person” has the meaning specified in section
275.
(2) The liquidator or provisional liquidator of a company may require one or more relevant persons to prepare a statement of affairs of the company in accordance with Part XI, Division 2. (3) Subject to section 280, the liquidator or provisional liquidator shall file with the Court each statement of affairs and each affidavit of concurrence that he or she receives.

132 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (4) Subsection (3) does not apply to a liquidator appointed by the members of a company. (Inserted by Act 11 of 2004) Preliminary report
226. (1) The liquidator of a company shall, within 60 days of the
commencement of the liquidation, prepare a preliminary report covering, to the best of his or her knowledge and belief, the following matters— (a) in the case of a company with share capital, the amount of capital issued, subscribed and paid up; (b) the assets and liabilities of the company; (c) if the company has failed, the causes of the failure; and (d) whether, in his or her opinion, further enquiries are desirable with respect to— (i) any matter relating to the promotion, formation or insolvency of the company or the conduct of the business or affairs of the company; and (ii) possible claims under Part IX. (2) The liquidator shall send a copy of the report prepared under subsection (1)— (a) to each creditor of the company; and (b) if in his or her report he or she states that further enquiries are desirable with respect to a matter referred to in subsection (1)(d), to the Official Receiver. (3) Subsection (2)(b) does not apply to the Official Receiver when he or she is acting as the liquidator of a company. (4) The Court may, on the application of the liquidator, extend the period specified in subsection (1) on such terms and conditions as it considers fit. Duty of Official Receiver concerning report under section 226
227. Where the Official Receiver receives a report under section 226, he or she
shall carry out such investigation, if any, as he or she considers appropriate. Miscellaneous Provisions Liquidator to call meetings of creditors
228. (1) The liquidator shall call a meeting of the creditors of a company in
liquidation if—
(a) a meeting is requisitioned by the creditors of the company in accordance with subsection (2); or (b) he or she is directed to do so by the Court. (2) A creditors’ meeting may be requisitioned in accordance with the Rules by 10% in value of the creditors of the company.

LAW OF VIRGIN ISLANDS Insolvency Act 133 Revision Date: 1 Jan 2020 Recession of contracts by the Court
229. (1) On the application of a person who is, as against the liquidator of a
company, entitled to the benefit or subject to the burden of a contract made with the company, the Court may make an order rescinding the contract on such terms as to payment by or to either party of damages for the non-performance of the contract, or otherwise as the Court considers just. (2) Any damages payable to a person under an order made under subsection (1) may be claimed by him or her as a debt in the liquidation of the company. Inspection of books by creditors
230. (1) At any time after the appointment of a liquidator of a company, the
Court may, on such terms as it considers appropriate, make an order for the inspection of specified books, records and documents of the company that are in its possession. (2) Application for an order under subsection (1) may be made by a creditor or member of the company. Enforcement of liquidator’s duties
231. (1) In this section, “specified person” means—
(a) the Official Receiver;
(b) a creditor of a company in liquidation; or (c) a member of a company in liquidation. (2) If a liquidator fails to file any notice, return, account or other document, a specified person may serve a notice on the liquidator requiring him or her to remedy the default. (3) If a liquidator fails to remedy the default specified in a notice served under subsection (1) within 14 days of service of the notice on him or her, any specified person may apply to the Court for an order that the liquidator remedy the default within such time as the Court may specify. (4) The Court may order that the costs of and incidental to an application under this section are payable by the liquidator personally. (5) A liquidator who fails to comply with an order made under subsection (3) commits an offence. (6) This section does not prejudice any other provision of this Act or any other enactment. Termination of Liquidation Termination of liquidation
232. The liquidation of a company terminates on the first occurring of—
(a) the making by the Court of an order terminating the liquidation under section 233, or such later date as may be specified in the order;

134 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (b) the filing by the liquidator of a certificate of compliance with the provisions of section 234(2), as modified by the Court under
section 234(4), if appropriate; or
(c) the making by the Court of an order under section 234(4) exempting the liquidator from compliance with 234(2), or such later date as may be specified in the order. Order terminating liquidation
233. (1) The Court may, at any time after the appointment of the liquidator of
a company, make an order terminating the liquidation if it is satisfied that it is just and equitable to do so. (2) An application under this section may be made by the liquidator, a creditor, a director or a member of the company or the Official Receiver. (3) Before making an order under subsection (1), the Court may require the liquidator to file a report with respect to any matters relevant to the application. (4) An order under subsection (1) may be made subject to such terms and conditions as the Court considers appropriate and, on making the order or at any time thereafter, the Court may give such supplemental directions or make such other order as it considers fit in connection with the termination of the liquidation. (5) Where the Court makes an order under subsection (1), the company ceases to be in liquidation and the liquidator ceases to hold office with effect from the date of the order or such later date as may be specified in the order. (6) Where the Court makes an order under subsection (1), the person who applied for the order shall, within 10 days of the date of the order, file a sealed copy of the order with the Registrar. (7) A person who contravenes subsection (6) commits an offence. Completion of liquidation
234. (1) In this section “Register” means, as appropriate—
(a) the register of international business companies maintained by the Registrar under the International Business Companies Act; (b) the register of companies maintained by the Registrar under the Companies Act; or (c) the Register of Companies maintained by the Registrar under the BVI Business Companies Act. (Inserted by Act 16 of 2004) (2) As soon as practicable after completing his or her duties in relation to the liquidation of a company, the liquidator shall— (a) prepare and send to every creditor of the company whose claim has been admitted and to every member of the company— (i) his or her final report, complying with subsection (3), and a statement of realisations and distributions in respect of the liquidation; and (Amended by Act 11 of 2004)

LAW OF VIRGIN ISLANDS Insolvency Act 135 Revision Date: 1 Jan 2020 (ii) a summary of the grounds upon which a creditor or member may object to the striking of the company from the Register; and (b) file with the Registrar a copy of the final report and the statement of realisations and distributions sent to the creditors and members of the company. (Amended by Act 11 of 2004) (3) The final report of a liquidator shall contain a statement— (a) that all known assets of the company have been disclaimed, realised or distributed without realisation; (b) that all proceeds of realisation have been distributed; and (c) that there is no reason why, in his or her opinion, the company should not be struck from the Register, and dissolved. (4) On the application of the liquidator, the Court may on such terms and conditions as it considers just— (a) exempt the liquidator from compliance with subsection (2)(a); or (b) modify the application of the provisions of subsection (2) to the liquidator. Release of liquidator
235. (1) A person who ceases to be the liquidator, or provisional liquidator, of
a company may apply to the Court for his or her release and the Court may grant the release unconditionally or upon such conditions as it considers fit, or it may withhold it. (2) If the Court withholds the release, it may make a compensation order against the former liquidator under section 254. (3) Subject to subsection (5), where a former liquidator is released under this section, he or she is discharged from all liability in respect of any act or default of his or her in relation to the administration of the company. (4) An order for the release of a former liquidator may be revoked by the Court if the release was obtained by fraud or the suppression or concealment of any material fact. (5) Subsection (3) does not prevent the Court from making an order under
section 254 against a liquidator who has been released under this section.
(6) Where the Official Receiver ceases to be liquidator and another liquidator is appointed in his or her place, the Official Receiver obtains his or her release— (a) from the appointment of the new liquidator; or (b) such later date as the Court may determine. (7) A liquidator who obtains his or her release under this section shall file a notice in the prescribed form with the Registrar.

136 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS Dissolution
236. The Rules shall provide for the dissolution of a company on the
termination and completion of the liquidation of the company.
PART VII
LIQUIDATION OF INSURANCE COMPANIES
Interpretation for and scope of this Part
237. (1) In this Part—
“property and casualty business” and “life and health business” have the meanings specified in section 2(1) of the Insurance Act; “property and casualty insurance company” means an insurance company that is or was authorised by its licence to carry on property and casualty business only; (Amended by Act 11 of 2004) “life and health insurance company” means an insurance company that is or was authorised by its licence to carry on life and health business, whether or not it is or was also authorised to carry on property and casualty business. (Amended by Act 11 of 2004) (Amended by Act 16 of 2015) (2) Subject to subsection (3), this Part applies, with such modifications as are necessary, to a company or a foreign company that has at no time held a licence as an insurer issued under the Insurance Act or the repealed Insurance Act, 1994 but which, immediately before the appointment of a liquidator, was required to hold a licence as an insurer issued under the Insurance Act or the repealed Insurance Act, 1994. (Amended by Act 1 of 2008) (3) Section 239 does not apply to a company specified in subsection (2).(Inserted by Act 11 of 2004) Liquidation of insurance companies
238. (1) The provisions of this Act relating to the liquidation of companies and
foreign companies are modified in respect of insurance companies to the extent specified in this Part. (Amended by Act 11 of 2004) (2) The liquidator of an insurance company has a duty to obtain and consider such actuarial advice as is appropriate to enable him or her to properly conduct the liquidation of the company. (Inserted by Act 11 of 2004) (3) The Cabinet may, on the advice of the Commission, make Regulations with respect to the liquidation of insurance companies. (Inserted by Act 11 of 2004) (4) Subject to subsection (5), the Regulations made under subsection (3) may— (a) modify or exclude the provisions of this Act and the Rules relating to the liquidation of companies in respect of insurance companies; and

LAW OF VIRGIN ISLANDS Insolvency Act 137 Revision Date: 1 Jan 2020 (b) make different provision for different persons, circumstances or cases. (Inserted by Act 11 of 2004) (5) Regulations made under subsection (3) shall not modify or exclude the provisions of this Part. (Inserted by Act 11 of 2004) Appointment of liquidator by members
239. (1) The members of a life and health insurance company may not appoint
a liquidator under Part VI.
(Amended by Act 16 of 2015)
(2) The members of a property and casualty insurance company, that is not a foreign company, may only appoint a liquidator under Part VI if the Commission has given its prior written consent to the appointment. (Amended by Act 16 of 2015) (3) Any resolution of the members— (a) of a life and health insurance company to appoint a liquidator under Part VI in contravention of subsection (1); or (b) of a property and casualty insurance company to appoint a liquidator under Part VI in contravention of subsection (2), is void and of no effect. (Amended by Act 16 of 2015) (4) Where the members of a property and casualty insurance company appoint a liquidator in accordance with this section, without limiting section 178(1)(a), the Commission may by notice in writing direct the liquidator to advertise his appointment in such manner as is specified in the notice. (Amended by Act 11 of 2004) (Amended by Act 16 of 2015) (5) A liquidator who fails to advertise his or her appointment in accordance with a direction of the Commission issued under subsection (4) commits an offence. Application for appointment of liquidator by Court
240. (1) For the purposes of sections 162(1)(c) and 163(1)(c), the public
interest includes the interests of the policyholders of an insurance company. (2) For the purposes of this Act, an insurance company is deemed to be insolvent if it is not in compliance with section 12(2) of the Insurance Act. (Substituted by Act 1 of 2008) (3) On an application for the appointment of a liquidator under this
section or under sections 162 or 163, evidence that an insurance company has at
any time prior to the date of the application been insolvent is, unless the contrary is proved, evidence that the company continues to be insolvent. (Amended by Act 11 of 2004) (4) This section is in addition to, and not in substitution for, sections 162 and 163. (Amended by Act 11 of 2004)

138 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS Reduction of contracts as alternative to winding up
241. Where on an application for the appointment of a liquidator, the Court is
satisfied that an insurance company is insolvent, it may reduce the amount of the insurance company’s contracts on such conditions as it considers just, instead of appointing a liquidator. Continuation of life and health business by liquidator appointed by Court (Amended by Act 16 of 2015)
242. (1) The liquidator of a life and health insurance company shall, unless the
Court otherwise orders, carry on the life and health business of the company with a view to it being transferred as a going concern to another insurance company, whether in existence or to be incorporated for the purpose. (Amended by Act 11 of 2004) (Amended by Act 16 of 2015) (2) In carrying on the insurance company’s life and health business under subsection (1), the liquidator may agree to the variation of any contracts of insurance at the commencement of the liquidation, but he or she shall not effect any new contracts of insurance. (Amended by Act 16 of 2015) (3) On the application of the liquidator of a life and health insurance company, the Court may by order reduce the amounts of the contracts made by the company in the course of carrying on its life and health business. (Amended by Act 16 of 2015) (4) An order under subsection (3) may be made subject to such conditions as the Court considers appropriate. (5) Without limiting section 186 or Schedule 2, the liquidator of a life and health insurance company may appoint an actuary to investigate and report to him or her on the life and health business of the company and, if appropriate, to conduct actuarial valuations of the business. (Amended by Act 16 of 2015) Protection of segregated funds and assets
243. (1) In the liquidation of a life and health insurance company, the assets of
the segregated funds of the company shall first be applied to meet the company’s life and health insurance liabilities attributable to such funds. (Amended by Act 16 of 2015) (2) If the value of the assets referred to in subsection (1) exceeds the amount of the life and health insurance liabilities of the company attributable to the segregated funds, the excess is an asset of the company available for distribution in accordance with this Act. (Amended by Act 16 of 2015) (3) Where the Court makes an order under section 254(3) in respect of a life and health insurance company requiring a person to repay, restore or account for money or other assets, to pay compensation to the company or to pay interest to the company, the Court shall, insofar as the delinquency relates to assets

LAW OF VIRGIN ISLANDS Insolvency Act 139 Revision Date: 1 Jan 2020 belonging to the company’s segregated funds, order that the money, assets or contribution is to be treated for the purposes of subsection (1) as assets of those funds. (Amended by Act 16 of 2015)
PART VIII
VOIDABLE TRANSACTIONS
Interpretation for this Part
244. (1) In this Part—
“insolvent liquidation” means a liquidation of a company where the assets of the company are insufficient to pay its liabilities and the expenses of the liquidation; “insolvency transaction” has the meaning specified in subsection (2); “officer holder” means— (a) in the case of a company in administration, its administrator; and (b) in the case of a company in liquidation, its liquidator; (Inserted by Act 11 of 2004) “onset of insolvency” means— (a) the date on which the application for the administration order was filed, where a company is in administration or is in liquidation and the liquidator was appointed by the Court immediately following the discharge of an administration order; (Amended by Act 11 of 2004) (b) the date on which the application for the appointment of the liquidator was filed, where a company is in liquidation and the liquidator was appointed by the Court in circumstances other than those set out in paragraph (a); or (c) the date of the appointment of the liquidator, where a company is in liquidation and the liquidator was appointed by the members; “voidable transaction” means— (a) an unfair preference; (b) an undervalue transaction; (c) a floating charge that is voidable under section 247; and (d) an extortionate credit transaction. “vulnerability period” means— (a) for the purposes of sections 245, 246 and 247— (i) in the case of a transaction entered into with, or a preference given to, a connected person, the period commencing 2 years prior to the onset of insolvency and ending on the

140 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS appointment of the administrator or, if the company is in liquidation, the liquidator; and (ii) in the case of a transaction entered into with, or a preference given to, any other person, the period commencing six months prior to the onset of insolvency and ending on the appointment of the administrator or, if the company is in liquidation, the liquidator; and (b) for the purposes of section 248, the period commencing 5 years prior to the onset of insolvency and ending on the appointment of the administrator or, if the company is in liquidation, the liquidator; (2) A transaction is an insolvency transaction if— (a) it is entered into at a time when the company is insolvent; or (b) it causes the company to become insolvent. (3) For the purposes of subsection (2), “insolvent” has the meaning specified in section 8(1) with the deletion of paragraph (c)(i). (4) This Part applies in respect of— (a) a company that is in administration; and (b) a company and a foreign company that is in liquidation and, where appropriate, “company” includes a foreign company. Unfair preferences
245. (1) Subject to subsection (2), a transaction entered into by a company is
an unfair preference given by the company to a creditor if the transaction— (a) is an insolvency transaction; (b) is entered into within the vulnerability period; and (c) has the effect of putting the creditor into a position which, in the event of the company going into insolvent liquidation, will be better than the position he or she would have been in if the transaction had not been entered into. (2) A transaction is not an unfair preference if the transaction took place in the ordinary course of business. (3) A transaction may be an unfair preference notwithstanding that it is entered into pursuant to the order of a court or tribunal in or outside the Virgin Islands. (4) Where a transaction entered into by a company within the vulnerability period has the effect specified in subsection (1)(c) in respect of a creditor who is a connected person, unless the contrary is proved, it is presumed that the transaction was an insolvency transaction and that it did not take place in the ordinary course of business. Undervalue transactions
246. (1) Subject to subsection (2), a company enters into an undervalue
transaction with a person if—

LAW OF VIRGIN ISLANDS Insolvency Act 141 Revision Date: 1 Jan 2020 (a) the company makes a gift to that person or otherwise enters into a transaction with that person on terms that provide for the company to receive no consideration; or (b) the company enters into a transaction with that person for a consideration the value of which, in money or money’s worth, is significantly less than the value, in money or money’s worth, of the consideration provided by the company; and (c) in either case, the transaction concerned— (i) is an insolvency transaction; and (ii) is entered into within the vulnerability period. (2) A company does not enter into an undervalue transaction with a person if— (a) the company enters into the transaction in good faith and for the purposes of its business; and (b) at the time when it enters into the transaction, there were reasonable grounds for believing that the transaction would benefit the company. (3) A transaction may be an undervalue transaction notwithstanding that it is entered into pursuant to the order of a court or tribunal in or outside the Virgin Islands. (4) Where a company enters into a transaction with a connected person within the vulnerability period and the transaction falls within subsection (1)(a) or subsection (1)(b), unless the contrary is proved, it is presumed that— (a) the transaction was an insolvency transaction; and (b) subsection (2) did not apply to the transaction. Voidable floating charges
247. (1) Subject to subsection (2), a floating charge created by a company is
voidable if—
(a) it is created within the vulnerability period; and (b) it is an insolvency transaction. (2) A floating charge is not voidable to the extent that it secures— (a) money advanced or paid to the company, or at its direction, at the same time as, or after, the creation of the charge; (b) the amount of any liability of the company discharged or reduced at the same time as, or after, the creation of the charge; (c) the value of assets sold or supplied, or services supplied, to the company at the same time as, or after, the creation of the charge; and (d) the interest, if any, payable on the amount referred to in paragraphs (a) to (c) pursuant to any agreement under which the money was advanced or paid, the liability was discharged or

142 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS reduced, the assets were sold or supplied or the services were supplied. (3) For the purposes of this section, where a company creates a floating charge in favour of a connected person within the vulnerability period, unless the contrary is proved, it is presumed that the charge was an insolvency transaction. (4) For the purposes of subsection (2)(c), the value of assets or services sold or supplied is the amount in money which, at the time they were sold or supplied, could reasonably have been expected to be obtained for the sale or supply of the goods or services in the ordinary course of business and on the same terms, apart from the consideration, as those on which the assets or services were sold or supplied to the company. Extortionate credit transactions
248. A transaction entered into by a company within the vulnerability period
for, or involving the provision of, credit to the company is an extortionate credit transaction if, having regard to the risk accepted by the person providing the credit— (a) the terms of the transaction are or were such as to require grossly exorbitant payments to be made (whether unconditionally or in certain contingencies) in respect of the provision of credit; or (b) the transaction otherwise grossly contravenes ordinary principles of fair trading. (Amended by Act 11 of 2004) Orders in respect of voidable transactions
249. (1) Subject to section 250, where it is satisfied that a transaction entered
into by a company is a voidable transaction the Court, on the application of the office holder— (a) may make an order setting aside the transaction in whole or in
part;
(b) in respect of an unfair preference or an undervalue transaction, may make such order as it considers fit for restoring the position to what it would have been if the company had not entered into that transaction; and (c) in respect of an extortionate credit transaction, may by order provide for any one or more of the following— (i) the variation of the terms of the transaction or the terms on which any security interest for the purposes of the transaction is held; (ii) the payment by any person who is or was a party to the transaction to the office holder of any sums paid by the company to that person by virtue of the transaction; (iii) the surrender by any person to the office holder of any asset held by him or her as security for the purposes of the transaction; and

LAW OF VIRGIN ISLANDS Insolvency Act 143 Revision Date: 1 Jan 2020 (iv) the taking of accounts between any persons. (Amended by Act 11 of 2004) (2) Without prejudice to the generality of subsection (1)(b), an order under that paragraph may— (a) require any assets transferred as part of the transaction to be vested in the company; (b) require any assets to be vested in the company if it represents in any person’s hands the application either of the proceeds of sale of assets transferred or of money transferred, in either case as part of the transaction; (c) release or discharge, in whole or in part, any security interest given by the company or the liability of the company under any contract; (d) require any person to pay, in respect of benefits received by him or her from the company, such sums to the office holder as the Court may direct; (Amended by Act 11 of 2004) (e) provide for any surety or guarantor whose obligations to any person were released or discharged, in whole or in part, under the transaction, to be under such new or revived obligations to that person as the Court considers appropriate; (f) provide for security to be provided for the discharge of any obligation imposed by or arising under the order, for such an obligation to be charged on any assets and for the security interest or charge to have the same priority as a security interest or charge released or discharged, in whole or in part, under the transaction; (g) provide for a person effected by an order made under subsection (1) to submit a claim in the liquidation of the company in such amount as the Court considers fit; and (Amended by Act 11 of 2004) (h) require the company to make a payment or transfer assets to any person affected by an order made under subsection (1). (3) Subject to section 250, in respect of an unfair preference or an undervalue transaction, an order under subsection (1) may affect the assets of, or impose any obligation on, any person whether or not he or she is the person with whom the company in question entered into the transaction. Limitations on orders under section 249
250. (1) This section applies to an order made under section 249(1) in respect
of an unfair preference or an undervalue transaction.
(2) An order to which subsection (1) applies shall not— (a) prejudice any interest in assets that was acquired in good faith and for value from a person other than the company, or prejudice any interest deriving from such an interest; or (b) require a person who received a benefit from the transaction in good faith and for value to pay a sum to the office holder, except

144 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS where that person was a party to the transaction or, in respect of an unfair preference, the preference was given to that person when he or she was a creditor of the company. (Amended by Act 11 of 2004) (3) For the purposes of subsection (2), where a person would, apart from the requirement for good faith, fall within the circumstances specified in paragraph (a) or (b), it is presumed, unless the contrary is proved, that he or she acquired the interest or received the benefit in good faith. (4) Subsection (3) does not apply to a person— (a) who, at the time of the transaction, had notice of— (i) the fact that the transaction was an unfair preference or an undervalue transaction, as the case may be; or (ii) the relevant proceedings as defined in subsection (5); or (b) who was, at the time of the transaction, a connected person. (5) For the purposes of subsection (4), a person has notice of the relevant proceedings if— (a) in the case of a company in administration, he or she had notice of the filing of the application on which the administration order was made; (b) in the case of a company where a liquidator was appointed immediately following the discharge of an administration order, he or she had notice of the filing of the application on which the administration order was made or the filing of the application on which the order appointing a liquidator was made; or (c) in the case of a company where a liquidator was appointed in circumstances other than those set out in paragraph (b), he or she had notice of the filing of the application on which the order appointing a liquidator was made. Recoveries
251. Any money paid to, assets recovered or other benefit received by the
liquidator as a result of an order made under section 249 are deemed to be assets of the company available to pay unsecured creditors of the company. Remedies not exclusive
252. The provisions of this Part apply without prejudice to the availability of
any other remedy, even in relation to a transaction that the company had no power to enter into.

LAW OF VIRGIN ISLANDS Insolvency Act 145 Revision Date: 1 Jan 2020
PART IX
MALPRACTICE
Interpretation for this Part
253. In this Part—
(a) a company or a foreign company goes into insolvent liquidation if a liquidator is appointed at a time when its assets are insufficient to pay its liabilities and the expenses of the liquidation; and (b) a relevant company is a company or a foreign company that has gone into insolvent liquidation. Summary remedy against delinquent officers and others
254. (1) On the application of the liquidator of a relevant company, the Court
may make an order under subsection (3) where it is satisfied that a person specified in subsection (2)— (a) has misapplied or retained, or become accountable for any money or other assets of the company; or (b) has been guilty of any misfeasance or breach of any fiduciary or other duty in relation to the company. (2) An order under subsection (3) may be made against a person— (a) who is or has been an officer of the company; (b) who has acted as liquidator of the company; (c) who, in the case of a relevant company that is not a foreign company, has acted as administrator, administrative receiver, supervisor or interim supervisor of the company; or (d) who, not being a person falling within paragraphs (a) or (b), is or has been concerned in the promotion, formation, management, liquidation or dissolution of the company. (3) Where subsection (1) applies, the Court may make one or more of the following orders against the person— (a) that he or she repays, restores or accounts for the money or other assets, or any part of it; (b) that he or she pays to the company as compensation for the misfeasance or breach of duty such sum as the Court considers just; and (c) that he or she pays interest to the company at such rate as the Court considers just. (4) The Court shall not make an order under subsection (3) unless it has given the person the opportunity— (a) to give evidence, call witnesses and bring other evidence in relation to the application; and

146 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (b) to be represented, at his own expense, by a legal practitioner who may put to him or her, or to other witnesses, such questions as the Court may allow for the purpose of explaining or qualifying any answers or evidence given. (5) Application may not be made for an order under this section against a liquidator or an administrator who has been released, except with the leave of the Court. (6) Nothing in this section prevents any person from instituting any other proceedings in relation to matters in respect of which an application may be made under this section. Fraudulent trading
255. (1) On the application of the liquidator of a relevant company, the Court
may make an order under subsection (2) where it is satisfied that, at any time before the commencement of the liquidation of the company, any of its business has been carried on— (a) with intent to defraud creditors of the company or creditors of any other person; or (b) for any fraudulent purpose. (2) Where subsection (1) applies, the Court may declare that any person who was knowingly a party to the carrying on of the business in such manner is liable to make such contribution, if any, to the company's assets as the Court considers proper. (Amended by Act 11 of 2004) Insolvent trading
256. (1) On the application of the liquidator of a relevant company, the Court
may make an order under subsection (2) against a person who is or has been a director of the company if it is satisfied that— (a) at any time before the commencement of the liquidation of the company, that person knew or ought to have concluded that there was no reasonable prospect that the company would avoid going into insolvent liquidation; and (b) he or she was a director of the company at that time. (2) Subject to subsection (3), where subsection (1) applies, the Court may order that the person concerned makes such contribution, if any, to the company’s assets as the Court considers proper. (3) The Court shall not make an order against a person under subsection (2) if it is satisfied that after he or she first knew, or ought to have concluded, that there was no reasonable prospect that the company would avoid going into insolvent liquidation, he or she took every step reasonably open to him or her to minimise the loss to the company’s creditors. (4) For the purposes of subsections (1) and (3), the facts which a director of a company ought to know or ascertain, the conclusions which he or she ought to reach and the steps reasonably open to him or her which he or she ought to take are those which would be known or ascertained, or reached or taken, by a reasonably diligent person having both—

LAW OF VIRGIN ISLANDS Insolvency Act 147 Revision Date: 1 Jan 2020 (a) the general knowledge, skill and experience that may reasonably be expected of a person carrying out the same functions as are carried out by that director in relation to the company; and (b) the general knowledge, skill and experience that that director has. (5) The reference in subsection (4) to the functions carried out in relation to a company by a director of the company includes any function which he or she does not carry out but which has been entrusted to him or her. (Amended by Act 11 of 2004) (6) Nothing in this section affects section 255. Recoveries under sections 255 and 256
257. Any money paid to, assets recovered or other benefit received by the
liquidator as a result of an order made under section 255 or section 256 are deemed to be assets of the company available to pay unsecured creditors of the company. Ancillary orders
258. (1) Where the Court makes an order under section 255 or section 256, it
may give such directions or make such further order as it considers proper for giving effect to the order. (Amended by Act 11 of 2004) (2) Without limiting subsection (1), the Court may— (a) provide for the liability of any person under the order to be a charge on any debt or obligation due from the company to him or her, or on any mortgage or charge or any interest in a mortgage or charge on assets of the company held by or vested in him or her, or any person on his or her behalf, or any person claiming as assignee from or through the person liable or any person acting on his or her behalf; and (b) from time to time make such further order as may be necessary for enforcing any charge imposed under this subsection. (3) For the purposes of subsection (2), “assignee”— (a) includes a person to whom or in whose favour, by the directions of the person made liable, the debt, obligation, mortgage or charge was created, issued or transferred or the interest created; but (b) does not include an assignee for valuable consideration, not including consideration by way of marriage, given in good faith and without notice of any of the matters on the ground of which the declaration is made. (4) Where the Court makes a declaration under either section 255 or 256 in relation to a person who is a creditor of the company, it may direct that the whole or any part of any debt owed by the company to that person and any interest on the debt shall rank in priority after all other debts owed by the company and after any interest on those debts.

148 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (5) Sections 255 and 256 have effect notwithstanding that the person concerned may be criminally liable in respect of matters on the ground of which the declaration under the section is to be made.
PART X
DISQUALIFICATION ORDERS AND UNDERTAKINGS Interpretation for this Part
259. (1) In this Part “voluntary liquidator” means—
(a) a liquidator appointed by the directors or members of an international business company; or (b) a voluntary liquidator within the meaning specified in section 2 of the BVI Business Companies Act. (Substituted by Act 16 of 2004) (2) For the purposes of this Part, a company becomes insolvent if— (a) an administration order is made in respect of the company; (b) an administrative receiver of the company is appointed; (c) a liquidator of the company is appointed at a time when its assets are insufficient to pay its liabilities and the expenses of the liquidation; or (d) a liquidator is appointed by the Court on the ground specified in
section 162(1)(c).
Disqualification orders and undertakings
260. (1) A disqualification order is an order that a person shall not, for the
period specified in the order, engage in a prohibited activity without the leave of the Court. (2) A disqualification undertaking is an undertaking in writing given by a person to the Official Receiver that he or she will not, for the period specified in the undertaking, engage in a prohibited activity without the leave of the Court. (3) For the purpose of this Part, a person engages in a prohibited activity if— (a) he or she is a director of a company; (b) he or she acts as the voluntary liquidator of a company; (c) he or she acts as the receiver of the assets of a company; (d) he or she acts as an insolvency practitioner; or (e) in any way, whether directly or indirectly, he or she is concerned with or takes part in the promotion, formation or management of a company; or (f) he or she undertakes any activity prescribed as a prohibited activity. (Amended by Act 11 of 2004)

LAW OF VIRGIN ISLANDS Insolvency Act 149 Revision Date: 1 Jan 2020 (4) A person is a “disqualified person” for the period in which— (a) a disqualification order has effect against him or her; or (b) a disqualification undertaking is in place in respect of him or her. (5) The period specified in a disqualification order, or disqualification undertaking, made against or in respect of a person, runs concurrently with the period specified in any other disqualification order or disqualification undertaking made against or in respect of that person. Application for disqualification order
261. (1) Subject to subsection (2), the Official Receiver may apply to the
Court for a disqualification order against a person under section 262. (2) An application for a disqualification order may not be made more than 6 years after the date on which the company concerned became insolvent. Hearing of application for disqualification order
262. (1) On an application under section 261, the Court may, make a
disqualification order against a person— (a) who has been convicted on indictment— (i) of an offence in connection with the promotion, formation, management or dissolution of a company that is or becomes insolvent; or (ii) of an offence under this Act that relates to a company that at any time becomes insolvent, whether the person was convicted before or after the company became insolvent; (b) who has had an order under section 255 or section 256 made against him or her; or (Amended by Act 11 of 2004) (c) who is or has been a director, voluntary liquidator or receiver of a company that is or becomes insolvent, whether while he or she was a director, voluntary liquidator or receiver or subsequently; and— (i) has been guilty of fraud in relation to the company or of any misfeasance or breach of duty as a director, voluntary liquidator or receiver of the company; (ii) where the Court is of the opinion that the person’s conduct as director, voluntary liquidator or receiver, either taken alone or taken together with his or her conduct as a director, voluntary liquidator or receiver of any other company or companies, makes him or her unfit to be concerned in the promotion, formation or management of companies or in their liquidation or dissolution. (d) (Repealed by Act 11 of 2004) (2) For the purposes of subsection (1)(c), “receiver” means a receiver other than an administrative receiver.

150 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (3) The reference in subsection (1)(c)(ii) to a person’s conduct as a director, voluntary liquidator or receiver of a company includes that person’s conduct in relation to any matter connected with or arising out of the insolvency of that company. (4) The Court shall, on making a disqualification order, specify the period for which the order has effect. (5) The period referred to in subsection (4) shall commence on a date no earlier than the date of the order and no later than 28 days after the date of the order and shall not exceed 10 years. (6) A person against whom an application for a disqualification order is made may appear and give evidence or call witnesses on the hearing of the application. Matters for determining unfitness of directors
263. Without limiting section 262(1)(c)(ii), in determining whether a person’s
conduct as a director, voluntary liquidator or receiver of a company makes him or her unfit to be concerned in the promotion, formation or management of companies or in their liquidation or dissolution, the Court shall, as respects his or her conduct as a director, voluntary liquidator or receiver of that company, have regard in particular to— (a) any misfeasance or breach of any fiduciary or other duty by him or her in relation to the company; (b) any misapplication or retention by him or her of, or any conduct by the director giving rise to an obligation to account for, any money or other assets of the company; (c) the extent of his responsibility for the company entering into any transaction liable to be set aside under Part VIII; (d) in the case of a director— (i) where the company or the board has persistently failed to comply with the BVI Business Companies Act, as the case may be, the extent of his or her responsibility for such failure; (Amended by Act 16 of 2004) (ii) the extent of his or her responsibility for the causes of the company becoming insolvent; and (iii) the extent of his or her responsibility for any failure by the company to supply any goods or services which have been paid for (in whole or in part); (e) his or her failure to comply with any obligation imposed on him or her under this Act; and (f) in the case of a voluntary liquidator, any failure to comply with
section 209 or 210 of the BVI Business Companies Act.
(Amended by Act 16 of 2004)

LAW OF VIRGIN ISLANDS Insolvency Act 151 Revision Date: 1 Jan 2020 Disqualification undertaking
264. (1) A person against whom a disqualification order could be made under
section 262 may offer the Official Receiver a disqualification undertaking,
whether or not the Official Receiver has made an application against him or her under that section. (2) The Official Receiver may accept an offer made to him or her under subsection (1) if he or she considers that— (a) there is a reasonable prospect that, on the hearing of an application under section 262, the Court would make a disqualification order against the person offering the undertaking; and (b) it is expedient and in the public interest to accept the offer. (3) A disqualification undertaking shall specify a period, commencing on the date of the undertaking, for which the undertaking has effect. (4) The period referred to in subsection (3) shall not exceed 10 years. General provisions concerning disqualification orders and undertakings
265. (1) A disqualification order may be made, or a disqualification
undertaking accepted, on grounds which are or include matters other than criminal convictions, notwithstanding that the person concerned may be criminally liable in respect of those matters. (2) Where the Court makes a disqualification order, or the Official Receiver accepts a disqualification undertaking, the Official Receiver shall, within 14 days of the date of the order or of his or her acceptance of the undertaking, file a notice in the prescribed form with the Registrar. Variation of disqualification order or undertaking
266. (1) The Court may, on the application of a disqualified person, vary a
disqualification order or a disqualification undertaking.
(2) Without limiting subsection (1), an order under that subsection may— (a) reduce the period for which the disqualification order, or undertaking, is in force; or (b) in the case of a disqualification undertaking, provide for it to cease to be in force. (3) An application for an order under subsection (1) shall be served on the Official Receiver no less than 14 days prior to the date of the hearing and the Official Receiver shall appear or be represented and is entitled to call or give evidence at the hearing. (4) Where the Court varies a disqualification order or undertaking, the Official Receiver shall, within 14 days of the date of the order, file a notice in the prescribed form with the Registrar.

152 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS Offence provisions
267. A disqualified person who engages in a prohibited activity commits an
offence.
Liability for engaging in prohibited activity
268. (1) A disqualified person incurs personal liability for the debts of a
company in accordance with subsection (2) if, without the leave of the Court— (a) he or she is involved in the management of a company; or (b) as a person involved in the management of a company, he or she acts on the instructions of a person he or she knows to be a disqualified person or an undischarged bankrupt. (2) Subject to subsection (3), the liability of a person to whom subsection (1) applies is— (a) to a liquidator of the company for every outstanding liability; and (b) to a creditor of the company for a liability to that creditor, incurred by the company at a time when subsection (1) applies to him or her. (3) A creditor may not take action against a person under subsection (2)(b) if the company is in liquidation. (4) For the purposes of subsection (1), a person is involved in the management of a company if— (a) he or she is a director of the company; or (b) he or she is concerned, whether directly or indirectly, or takes
part, in the management of the company.
(5) For the purposes of this section, a person who, as a person involved in the management of a company, has at any time acted on instructions given without the leave of the court by a person whom he or she knew at that time to be a disqualified person or to be an undischarged bankrupt is presumed, unless the contrary is shown, to have been willing at any time thereafter to act on any instructions given by that person. Official Receiver to appear on certain applications
269. The Official Receiver shall appear and call the attention of the Court to
any matters which seem to him or her to be relevant, and may himself or herself give evidence or call witnesses on the hearing of— (a) an application by the Official Receiver for a disqualification order; (b) an application made by any person for leave under this Part. Register of disqualification orders
270. (1) The Registrar shall register in a Register of Disqualification Orders
and Undertakings to be maintained by him or her for the purpose of—

LAW OF VIRGIN ISLANDS Insolvency Act 153 Revision Date: 1 Jan 2020 (a) each disqualification order or undertaking in respect of which notice is filed under section 265; and (b) each variation of a disqualification order or undertaking in respect of which notice is filed under section 266. (2) When a disqualification order or undertaking ceases to be in force, the Registrar shall delete the entry from the Register. (3) The Register of Disqualification Orders and Undertakings shall be open to inspection on payment of such fee as may be prescribed. (4) No person shall be construed as having knowledge that another person is a disqualified person by virtue of an entry in the Register of Disqualification Orders. Duties of office holders
271. (1) If it appears to the liquidator, administrator or administrative receiver
of a company that the conduct of a director or former director of the company, either taken alone or taken together with his or her conduct as a director of any other company or companies, makes him or her unfit to be concerned in the management of companies, he or she shall, as soon as practicable, prepare a written report in the prescribed form and send it to the Official Receiver. (Amended by Act 11 of 2004) (2) The Official Receiver may by notice in writing require a liquidator, administrator or administrative receiver who has sent him or her a report under subsection (1) to— (a) provide him or her with such information or explanations, or (b) to produce such books, records or other documents; as he or she may reasonably require for considering or preparing an application for an order under section 262. (3) If a liquidator, administrator or administrative receiver fails to comply with a notice issued under subsection (2), the Court may, on the application of the Official Receiver, make an order directing compliance within the period specified in the order. (4) The Court may order that the costs of and incidental to an application under subsection (3) shall be borne by the person against whom the order is made. (4A) A liquidator, administrator or administrative receiver who prepares a report under subsection (1) shall not disclose the report to the creditors’ committee, if any, or to any person other than the Official Receiver. (Inserted by Act 11 of 2004) (4B) Subsection (4A) does not prevent a liquidator, administrator or administrative receiver disclosing the report to any person properly employed or appointed by him or her, or acting for him or her, in the liquidation, administration or administrative receivership. (Inserted by Act 11 of 2004) (4C) A report provided to the Official Receiver under subsection (1) shall, in the absence of fraud or malice, be absolutely privileged for the purposes of the law of defamation. (Inserted by Act 11 of 2004)

154 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (4D) Subsection (4C) shall not apply to the extent that the liquidator, administrator or administrative receiver, or a person to whom the report is disclosed under subsection (4B), discloses the report to another person in breach of subsection (4A). (Inserted by Act 11 of 2004) (5) A person who fails to comply with an order made under subsection (3) commits an offence.
PART XI
GENERAL PROVISIONS WITH REGARD TO COMPANIES THAT ARE INSOLVENT OR IN LIQUIDATION Division 1 General Interpretation
272. (1) Subject to subsection (2), in this Part “office holder”, in respect of a
company, means its administrator, its liquidator, its provisional liquidator or its administrative receiver. (2) In Division 3, “office holder” has the meaning specified in section
281. (Amended by Act 11 of 2004)
Application to Court concerning office holder
273. A person aggrieved by an act, omission or decision of an office holder
may apply to the Court and the Court may confirm, reverse or modify the act, omission or decision of the office holder. Company’s books
274. Where a company is in administration or liquidation, all documents of the
company and of the administrator or liquidator are, as between the members of the company, prima facie evidence of the truth of all matters purporting to be recorded in them. Order to deliver assets and documents 274A. (1) Where any person has in his or her possession or control any assets or documents to which the company appears to be entitled, the Court may, on the application of the office holder, require that person forthwith, or within such period as the Court may direct, to pay, deliver, convey, surrender or transfer the assets or documents to the office holder. (2) Subsection (3) has effect where the office holder— (a) seizes or disposes of any asset which is not an asset of the company; and (b) at the time of seizure or disposal believes, and has reasonable grounds for believing, that he or she is entitled, whether in

LAW OF VIRGIN ISLANDS Insolvency Act 155 Revision Date: 1 Jan 2020 pursuance of an order of the Court or otherwise, to seize or dispose of that asset. (3) In the circumstances specified in subsection (2), the office holder— (a) is not liable to any person in respect of any loss or damage resulting from the seizure or disposal except in so far as that loss or damage is caused by the office holder’s own negligence; and (b) has a lien on the asset, or the proceeds of its sale, for such expenses as were incurred in connection with the seizure or disposal. (Inserted by Act 11 of 2004) Division 2 Statement of Affairs Interpretation for this Division
275. (1) In this Division—
“office holder” (Repealed by Act 11 of 2004) “relevant period” means the period of 2 years prior to— (a) in the case of a company in administration, the date of the administration order; (b) in the case of a company in liquidation, the date of the appointment of the liquidator; (c) where a provisional liquidator has been appointed, the date of his or her appointment; and (d) where an administrative receiver has been appointed, the date of his or her appointment; “relevant person” means— (a) a person who is or who, within the relevant period, has been an officer of the company; (b) a person who is or who, within the relevant period, has been in the employment of the company and who, in the office holder’s opinion is capable of providing the information required; (c) a person who is or who, within the relevant period, has been an officer of or in the employment of a company which is an officer of the company; or (d) a person who, within the relevant period, has promoted the formation of the company. (2) For the purposes of the definition of “relevant person”, “employment” includes employment under a contract for services.

156 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS Notice to be given by office holder
276. (1) Where, pursuant to a provision in this Act, an office holder requires a
relevant person to prepare a statement of affairs and submit it to him or her, he or she shall send a notice to that person in the prescribed form. (2) A notice sent under subsection (1) shall specify a date by which the statement of affairs is to be delivered to him or her, which shall be no earlier than 24 days after the date upon which the notice is sent to the relevant person. Statement of Affairs
277. (1) A statement of affairs shall be in the prescribed form and contain the
particulars prescribed.
(2) Without limiting subsection (1), the following particulars shall be set out in a statement of affairs— (a) the assets and liabilities of the company; (b) the names and addresses of the creditors of the company; (c) the security interests held by creditors of the company and the dates upon which the security interests were created; and (d) such further information as may be prescribed. (3) Subject to section 278, a relevant person required by an office holder to prepare and submit a statement of affairs shall verify the statement of affairs by affidavit and submit the statement of affairs to the office holder, together with the verifying affidavit, on or before the date specified in the notice sent to him or her under section 276(1). (4) A relevant person who, without reasonable excuse, contravenes subsection (3) commits an offence. Affidavit of concurrence
278. (1) A relevant person required by an office holder to prepare and submit a
statement of affairs may, instead, submit an affidavit of concurrence complying with the Rules. (2) A relevant person who submits an affidavit of concurrence to an office holder on or before the date specified in the notice sent to him or her does not commit an offence under section 277(4). Release from duty to submit statement of affairs
279. (1) An office holder or the Court may, in accordance with the Rules—
(a) release a person from an obligation imposed on him or her to prepare and submit a statement of affairs; or (b) extend the period of time for the submission of the statement of affairs. (2) An order of the Court under this section may be made subject to such terms and conditions as the Court considers fit.

LAW OF VIRGIN ISLANDS Insolvency Act 157 Revision Date: 1 Jan 2020 Application for order of limited disclosure
280. (1) Where an office holder considers that it would prejudice the conduct
of the insolvency proceeding for the whole or part of a statement of affairs submitted to him or her to be disclosed, he or she may apply to the Court for an order of limited disclosure in respect of the statement of affairs, or any specified
part of it.
(2) The Court may, on an application under subsection (1), order that the statement of affairs or, as the case may be, the specified part of it— (a) in the case of an administrative receivership, is not to be open to inspection otherwise than with leave of the Court; or (b) in any other case, is not filed in Court, or that it is filed separately and that it is not to be open to inspection otherwise than with leave of the Court. (3) An order of the Court under subsection (2) may include directions as to the delivery of documents to the Registrar and the disclosure of relevant information to other persons. Division 3 Investigation of Insolvent Company’s Affairs Office Holder’s Powers Interpretation for this Division
281. In this Division—
“relevant period” has the meaning specified in section 275; “office holder”, in respect of a company, means its administrator, its liquidator or its provisional liquidator and, in respect of a company in administration or liquidation or in respect of which a provisional liquidator has been appointed, includes the Official Receiver; (Amended by Act 11 of 2004) Power to obtain information
282. (1) An office holder may, by notice in writing, require a person specified
in subsection (2)—
(a) to provide him or her with such information concerning the company, including the promotion, formation, business, dealings, accounts, assets, liabilities or affairs as he or she reasonably requires; (b) to attend on him or her at such reasonable time and at such place as may be specified in the notice; or (c) to be examined on oath or affirmation by him or her, or by his or her legal practitioner, on any matter referred to in paragraph (a). (Amended by Act 11 of 2004) (2) A notice under subsection (1) may be sent to— (a) an officer or former officer of the company;

158 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (b) a member or former member of the company; (c) a person who was involved in the promotion or formation of the company; (d) a person who is, or within the relevant period has been, employed by the company, including a person employed under a contract for services; (e) a person who is, or at any time has been, a receiver, accountant or auditor of the company; (f) a person who is or who, at any time has been, an officer of or in the employment of a company which is an officer of the company; or (g) if the office holder is the Official Receiver or a liquidator or provisional liquidator to any person who has acted as administrator, liquidator or provisional liquidator of the company. (Amended by Act 11 of 2004) (3) A person who receives a notice under subsection (1) and who, without reasonable excuse, fails to comply with the notice, commits an offence. Examination by office holder
283. (1) This section applies to the examination of a person under section
282(1)(c) by an office holder.
(2) The office holder, or the legal practitioner conducting the examination on his or her behalf, may administer an oath to, or take the affirmation of, a person to be examined. (3) A person required to be examined is entitled to be represented by a legal practitioner. (4) The office holder shall ensure that the examination is recorded in writing or by means of a tape recorder or other similar device. Examination Before Court Application for examination before Court
284. (1) Where a company is in liquidation, an application may be made to the
Court, ex parte, by the liquidator or by the Official Receiver, for an order that a person specified in subsection (2) appear before the Court for examination concerning the company, or a connected company, including the promotion, formation, business, dealings, accounts, assets, liabilities or affairs of the company or connected company. (2) An application under subsection (1) may be made in respect of— (a) a person specified in section 282(2); or (b) any other person who the applicant considers is capable of giving information concerning the company or a connected company; or (Amended by Act 11 of 2004)

LAW OF VIRGIN ISLANDS Insolvency Act 159 Revision Date: 1 Jan 2020 (c) any other person who the applicant knows or suspects has in his or her possession or control any asset of the company or is indebted to the company. (Inserted by Act 11 of 2004) (3) An application under subsection (1) shall state whether the applicant seeks a public or a private examination. Order for examination
285. (1) In this section, “examinee” means the person to be examined before
the Court.
(2) On hearing an application made under subsection 284, the Court may order the examinee to appear before the Court to be examined. (3) An order under subsection (1)— (a) shall direct the examinee to appear before the Court to be examined at a venue specified in the order; (b) shall state whether the examination is to be a public or a private examination; (c) may require the person concerned to produce at the examination any books, records or other documents in his or her possession or control that relate to the company, or a connected company, including the promotion, formation, business, dealings, accounts, assets, liabilities or affairs of the company or connected company; (d) may provide for an alternative method of service of the order on the examinee; (e) shall state the action that may be taken against a person if he or she does not appear before the Court as required by the order; and (f) where the examination is to be a public examination, may require the examination to be advertised, specifying the method of such advertisement. (4) Where the Court makes an order under subsection (2), the applicant shall, forthwith serve a sealed copy of the order on the examinee and, where the liquidator is not the Official Receiver (a) if the applicant is the liquidator of the company, send a sealed copy of the order to the Official Receiver; or (Amended by Act 11 of 2004) (b) if the applicant is the Official Receiver, send a sealed copy of the order to the liquidator of the company. (Amended by Act 11 of 2004) (5) Where an order under subsection (2) is for the public examination of an examinee, the applicant shall give not less than 14 days notice of the examination to each creditor and member of the company. (6) The Court may as part of an order made under this section, or at any subsequent time, make one or more of the following directions— (a) a direction specifying the matters upon which the examinee may be examined; and

160 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (b) a direction specifying the procedures to be followed at the examination. Conduct of examination
286. (1) This section applies to an examination held pursuant to an order made
under section 285.
(2) An examinee shall be examined on oath and he or she shall answer such questions as the Court may put, or allow to be put to him or her. (3) Subject to subsection (2), an examination is conducted by the applicant, or by his or her legal practitioner, and the person examined is entitled to be represented by a legal practitioner who may put such questions to the examinee as the Court may allow for the purpose of explaining or qualifying answers given by him or her. (4) The examinee may also be examined— (a) if the applicant is the Official Receiver, by the liquidator; or (b) if the applicant is the liquidator of the company, by the Official Receiver. (5) At a public examination questions may, with the leave of the Court, be put to the examinee by any creditor or member of the company present at the examination or by the legal practitioner representing such creditor or member. (6) An examination shall be recorded in writing and the examinee shall sign the record. (7) Subject to section 287, the written record of an examination is admissible in evidence in any proceedings under this Act other than proceedings for a disqualification order under Part X. (Amended by Act 11 of 2004) Incriminating answers and admissibility of record
287. (1) An examinee is not excused from answering a question put to him or
her by an office holder under section 282 or at an examination held pursuant to an order made under section 285 on the ground that the answer may incriminate him or her or tend to incriminate him or her. (2) The record of an examination held under section 282 or pursuant to an order made under section 285 is not admissible as evidence in any criminal proceedings against the examinee except where he or she is charged with the offence of perjury. Offence
288. (1) A person who, without reasonable excuse, fails to attend an
examination ordered to be held under section 285, commits an offence. (2) Where a person without reasonable excuse fails at any time to attend an examination ordered to be held under section 285, or there are reasonable grounds for believing that a person has absconded, or is about to abscond, with a view to avoiding or delaying his or her examination, the Court may cause a warrant to be issued to a police officer or a prescribed officer of the Court— (a) for the arrest of that person; and

LAW OF VIRGIN ISLANDS Insolvency Act 161 Revision Date: 1 Jan 2020 (b) for the seizure of any books, papers, records, money or goods in that person’s possession. (Amended by Act 11 of 2004) (3) In such a case the Court may authorise the person arrested under the warrant to be kept in custody, and anything seized under such a warrant to be held, in accordance with the Rules, until such time as the court may order. Division 4 Offence Provisions Fraudulent conduct
289. (1) Where a liquidator of a company is appointed under section 159, a
person who is or has been an officer of the company is deemed to have committed an offence if, at any time whilst an officer or during the period of 12 months preceding the commencement of the liquidation, he or she has— (a) made or caused to be made any gift or transfer of, or charge on, or has caused, permitted or acquiesced in the levying of any execution against the company’s assets; or (b) has concealed or removed any of the company’s assets since, or within, 60 days of the date of any unsatisfied judgment or order for the payment of money obtained against the company. (Amended by Act 11 of 2004) (2) A person is not guilty of an offence under this section— (a) by reason of conduct constituting an offence under subsection (1)(a) which occurred more than 5 years before the commencement of the liquidation; or (b) if he or she proves that, at the time of the conduct constituting the offence, he or she had no intent to defraud the company’s creditors.
PART XII
BANKRUPTCY
Preliminary
Interpretation
290. In this Part—
“bankrupt” means the individual against whom a bankruptcy order is made; “bankruptcy offence” means an offence under Part XIII; “debtor” means the individual to whom an application for a bankruptcy order relates; “prescribed minimum” means the minimum amount of the debt for which a statutory demand may be issued under section 155; and

162 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS “trustee” means the bankruptcy trustee of a bankrupt. Application of this Part to Official Receiver
291. Where the Official Receiver is appointed as the trustee of a bankrupt, the
provisions of this Act that apply to a trustee apply to the Official Receiver, as trustee, unless otherwise provided. Bankruptcy Order Meaning and duration of bankruptcy order
292. (1) A bankruptcy order is an order of the Court vesting the assets of an
individual in a bankruptcy trustee appointed by the Court for the purposes of division amongst his or her creditors in accordance with this Part. (2) The bankruptcy of an individual commences at the time at which the bankruptcy order is made and continues until it is terminated by the discharge of the bankrupt under section 376 or 379. (3) Throughout the period referred to in subsection (2), the individual is referred to in this Act as “in bankruptcy”. Conditions for making of bankruptcy order
293. (1) The Court shall not make a bankruptcy order against a debtor under
this Part unless it is satisfied—
(a) that on the date that the application was filed, the debtor— (i) was ordinarily resident in the Virgin Islands; (ii) was personally present in the Virgin Islands; (iii) was carrying on business in the Virgin Islands, either personally or by means of an agent or manager; (iv) was a member of a partnership carrying on business in the Virgin Islands by means of a partner or partners or of an agent or manager; or (v) had a place of residence or a place of business in the Virgin Islands; (Amended by Act 11 of 2004) (b) that the debtor has or appears to have assets in the Virgin Islands; or (c) that there is a reasonable prospect that the making of a bankruptcy order will benefit the creditors of the debtor. (2) For the purposes of subsection (1)(a)(iii) and (iv), a debtor or a partnership is deemed to be carrying on business in the Virgin Islands if liabilities incurred in the course of a business formerly carried on in the Virgin Islands remain unpaid.

LAW OF VIRGIN ISLANDS Insolvency Act 163 Revision Date: 1 Jan 2020 Persons who may apply for a bankruptcy order
294. Application to the Court for a bankruptcy order in respect of a debtor may
be made—
(a) by the debtor himself or herself under section 295; (b) by a creditor of the debtor, or by one or more of his or her creditors jointly, under section 296; or (Amended by Act 11 of 2004) (c) by the supervisor of an arrangement or by a creditor of the debtor under section 301. (Amended by Act 11 of 2004) Application by debtor
295. (1) The Court may make a bankruptcy order against a debtor on the
application of the debtor himself or herself if it is satisfied— (a) that the debtor is unable to pay his or her debts as they fall due; (b) that the unsecured liabilities of the debtor exceed the prescribed minimum; and (c) that, if a bankruptcy order is made, the value of the debtor’s assets available for distribution to his or her unsecured creditors will exceed the prescribed minimum. (2) An application for a bankruptcy order filed by a debtor under subsection (1) shall be accompanied by a verified statement of his or her assets and liabilities. (Amended by Act 11 of 2004) Creditor’s application
296. (1) A creditor’s application for a bankruptcy order shall be made in
respect of a liability or liabilities where, at the time of the application— (a) the amount of the liability, or the aggregate amount of the liabilities, exceeds the prescribed minimum; and (b) the liability, or each of the liabilities, is for a liquidated sum payable to the applicant creditor immediately. (2) An application under subsection (1) may not be made in respect of a liability incurred outside the Virgin Islands unless the liability is payable by the debtor to the creditor by virtue of a judgment or award enforceable by execution in the Virgin Islands. Substitution of applicant
297. (1) In the circumstances specified in subsection (2), the Court may, by
order, substitute as applicant in a creditor’s application for a bankruptcy order, a creditor— (a) who has given notice of his or her intention to appear at the hearing of the application in accordance with the Rules; (b) who would otherwise have been entitled to make such an application on the date that the original application was made; and

164 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (c) who consents to being substituted as the applicant. (2) The Court may make a substitution order under subsection (1) if it considers it appropriate to do so— (a) because the applicant applies to withdraw the application or consents to it being dismissed; (b) because the Court considers that the application is not being diligently proceeded with; (c) where the applicant is not entitled to make the application; or (d) for any other reason. Application by secured creditor
298. (1) Where the applicant for a bankruptcy order is a secured creditor, he or
she shall in his or her application state the full amount of the liability of the debtor to him or her and— (a) state that he or she is willing, in the event of a bankruptcy order being made, to give up his or her security interest for the benefit of the other creditors of the bankrupt; or (b) give an estimate of the value of his security interest and make the application in respect of the full amount of the liability of the debtor to him or her less the estimated value of his or her security interest. (2) In a case falling within subsection (1)(b), the secured creditor is treated as an unsecured creditor in respect of the unsecured liability of the debtor to him or her Secured creditor failing to disclose security interest
299. (1) Subject to subsection (2), a secured creditor who fails to disclose his
or her security interest in an application for a bankruptcy order against a debtor is, in the event that a bankruptcy order is made on the application, deemed to have given up his or her security interest for the benefit of the other creditors of the bankrupt. (2) If on the application of a secured creditor the Court is satisfied that the failure of the creditor to disclose his or her security interest was inadvertent or due to an honest mistake, it may disapply subsection (1) subject to such terms and conditions as it considers appropriate. (3) Where subsection (1) applies, the secured creditor concerned— (a) is not entitled to enforce his security interest against the estate of the bankrupt or to retain any proceeds from the realisation of the security interest; and (b) shall execute such document of release as is required by the trustee or account and pay over to the trustee all proceeds from any realisation of his security interest. (4) Where a secured creditor fails to execute a document of release as required by subsection (2)(b), the trustee may apply to the Court for an order that the trustee may execute the document on his or her behalf and, where the Court

LAW OF VIRGIN ISLANDS Insolvency Act 165 Revision Date: 1 Jan 2020 makes such an order, the execution of the document by the trustee takes effect as if executed by the secured creditor. (5) A secured creditor who fails to account or pay to the trustee the proceeds from any realisation of his or her security interest in accordance with subsection (3)(b) commits an offence. Hearing of creditor’s application
300. (1) Subject to subsection (2), the Court may make a bankruptcy order on
an application made under section 296 if it is satisfied that the debtor is insolvent within the meaning of section 8(2) and— (a) where the debtor has failed to comply with the requirements of a statutory demand, the demand was made by the creditor making the application; or (b) where execution or other process has been returned unsatisfied, the debt is payable to the creditor making the application. (2) The Court shall not make a bankruptcy order under subsection (1) unless it is satisfied that— (a) the debt, or one of the debts, in respect of which the application is made is a debt which, having been payable at the date of the application, has neither been paid nor secured nor compounded for; and (b) where the debtor does not appear at the hearing, he or she has been served with the application. (3) The Court may dismiss an application made under section 296 if— (a) it is not satisfied with the proof of the liability or liabilities in respect of which the application is made; (b) it is not satisfied with the proof of the service of the application on the debtor; (c) it is satisfied that the debtor is able to discharge all his or her liabilities; (d) it is satisfied that the debtor has made an offer to secure or compound for a liability in respect of which the application is made, the acceptance of which would have required the dismissal of the application and that offer has been unreasonably refused by the creditor making the application; or (e) it is satisfied that for some other sufficient reason, a bankruptcy order ought not to be made. (4) Nothing in section 296 or in this section limits the power of the Court, in accordance with the rules, to authorise a creditor's application to be amended by the omission of any creditor or liability. (5) Where an application is amended under subsection (4), the Court may order that the application is proceeded with as if anything done for the purposes of this section or section 296 had been done only by or in relation to the remaining creditors or debts.

166 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS Application where individual creditors’ arrangement in place
301. (1) Where an individual creditors’ arrangement has been approved under
Part II and has not been completed or otherwise come to an end, the Court may
make a bankruptcy order against a debtor on the application of the supervisor or a creditor bound by the arrangement if it is satisfied— (a) that the debtor has failed to comply with his or her obligations under the arrangement; or (b) that information which was false or misleading in any material particular or which contained material omissions— (i) was contained in any statement of assets and liabilities or other document supplied by the debtor under Part II to any person; or (ii) was otherwise made available by the debtor to his or her creditors at or in connection with a meeting summoned under that Part, or (c) that the debtor has failed to do all such things as may for the purposes of the arrangement have been reasonably required of him or her by the supervisor of the arrangement. (Amended by Act 11 of 2004) (2) Where a bankruptcy order is made on an application under subsection (1), any remuneration of the supervisor is a first charge on the bankrupt’s estate. Consolidation of applications
302. Where 2 or more applications for bankruptcy orders are presented against
the same debtor, the Court may consolidate the proceedings or any of them on such terms as it considers fit. Withdrawal of application
303. An application for a bankruptcy order may not be withdrawn except with
the leave of the Court.
Court’s powers on hearing of application for bankruptcy order
304. On the hearing of an application for a bankruptcy order under section 295,
section 296 or section 301, the Court may—
(a) make a bankruptcy order;
(b) if it appears appropriate to do so on the grounds that there has been a contravention of the Rules or for any other reason, dismiss the application or stay proceedings on the application on such terms and conditions as it considers fit; (c) adjourn the hearing conditionally or unconditionally; or (d) make any interim order or other order that it considers fit.

LAW OF VIRGIN ISLANDS Insolvency Act 167 Revision Date: 1 Jan 2020 Appointment of bankruptcy trustee
305. Where the Court makes a bankruptcy order it shall appoint either the
Official Receiver or an eligible insolvency practitioner to be the bankruptcy trustee of the bankrupt. (Amended by Act 11 of 2004) Period within which application shall be determined
306. (1) Subject to subsection (2), an application for a bankruptcy order shall
be determined within 3 months after it is filed.
(2) The Court may, upon such conditions as it considers fit, extend the period referred to in subsection (1) for a period of, or where it grants more than one extension for an aggregate period not exceeding, 3 months if— (a) it is satisfied that special circumstances justify the extension; and (b) the order extending the period is made before the expiry of that period or, if a previous order has been made under this subsection, that period as extended. (3) If an application is not determined within the period referred to in subsection (1) or within that period as extended, it is deemed to have been dismissed. Interim Relief Protection of assets after application for bankruptcy order
307. (1) Where an application for a bankruptcy order has been filed in respect
of a debtor but not yet determined or withdrawn, the Court may, if it considers it necessary for the protection of the debtor’s assets— (a) make an order directing the Official Receiver or an eligible insolvency practitioner to take control of— (i) the debtor’s assets, or any part of them; and (ii) such books or other documents of the debtor as may be specified in the order; and (b) make any other order in relation to the debtor’s assets. (2) An application for an order under subsection (1) may be made by— (a) the applicant for the bankruptcy order; (b) the debtor himself or herself; or (c) any creditor of the debtor. (3) An order under subsection (1) may be made on such terms as it considers fit and may, as a condition precedent, require the applicant to deposit at Court such sum as the Court considers reasonable to cover the remuneration of the Official Receiver or the insolvency practitioner appointed. (4) An order under subsection (1) remains in effect until the earlier of— (a) the discharge of the order by the Court of its own motion or on the application of—

168 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (i) the Official Receiver or eligible insolvency practitioner appointed under subsection (1)(a); or (ii) any person specified in subsection (2); or (b) the determination or withdrawal of the application for a bankruptcy order, whereupon the appointment of the Official Receiver or insolvency practitioner is terminated. (5) On the order ceasing to have effect, the Court may give such directions or make such order with respect to the accounts of the administration of the appointee, or to any other matter, as it considers appropriate. Effect of order under section 307
308. Whilst an order under section 307(1) is in effect, unless the leave of the
Court has been obtained—
(a) no steps may be taken to enforce any security interest over the debtor’s assets; (b) no steps may be taken to repossess assets that are being used or occupied by or are in the possession of the debtor; including— (i) goods supplied under a hire purchase, conditional sale or chattel leasing agreement; and (ii) goods supplied subject to a retention of title agreement; and (c) no proceedings, execution or other legal process may be commenced or continued or distress levied against the debtor or his assets. Remuneration of person appointed under section 307
309. (1) The Official Receiver or the insolvency practitioner directed to take
control of a debtor’s assets under section 307(1) is entitled to be paid such remuneration as the Court may order applying the general principles specified in
section 432. (Amended by Act 11 of 2004)
(2) Subject to subsections (3) and (4), the remuneration ordered to be paid under subsection (1) is payable— (a) where a bankruptcy order is not made, out of the assets of the debtor; (b) where a bankruptcy order is made, out of the bankrupt’s estate in accordance with the prescribed priority. (3) If a bankruptcy order is not made, the Court may order the applicant for the order under section 307 to pay or contribute to the remuneration of the Official Receiver or insolvency practitioner directed to take control of the assets under section 307(1) if it is satisfied that the applicant— (a) misled the Court when making the application; or (b) acted unreasonably in making the application. (4) If the assets of the debtor are not sufficient to pay the remuneration ordered to be paid by the Court under subsection (1), the Court may order the

LAW OF VIRGIN ISLANDS Insolvency Act 169 Revision Date: 1 Jan 2020 shortfall, or part of the shortfall, to be paid by the applicant for the order under
section 307. (Amended by Act 11 of 2004)
(5) Unless the Court otherwise orders, where subsection (2)(a) applies, the Official Receiver, or the insolvency practitioner appointed under section 307, may retain out of the debtor’s assets such sums or assets as are, or may be, required for meeting his remuneration. Examination
310. The Official Receiver or the insolvency practitioner directed to take
control of a debtor’s assets under section 307(1) may apply for an order to examine the debtor under section 369, and sections 369 to 373 apply as if— (a) references to the Official Receiver or the trustee were to the person directed to take control of the debtor’s assets; and (b) references to the bankrupt and to his or her estate were to the debtor and his or her assets. Effect of Bankruptcy Effect of bankruptcy order
311. On the making of a bankruptcy order, the assets comprised in the
bankrupt’s estate—
(a) vest in his or her trustee without any conveyance, assignment or transfer; and (b) become divisible among his or her creditors in accordance with this Act. Power to stay or restrain proceedings
312. (1) An order under subsection (2) or (3) may be made—
(a) after an application for a bankruptcy order has been filed against an individual but not yet determined; or (b) whilst an individual is an undischarged bankrupt. (2) At any time during either period specified in subsection (1)— (a) the Court may stay any action, proceeding, execution, distress or other legal process against the person or the assets of the individual concerned; and (b) any court in which proceedings are pending against any individual may either stay the proceedings or allow them to continue on such terms as it thinks fit. (3) After the making of a bankruptcy order no person who is a creditor of the bankrupt in respect of a debt that may be claimed in the bankruptcy shall— (a) have any remedy against the assets or person of the bankrupt in respect of that debt; or

170 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (b) before the discharge of the bankrupt, commence any action or other legal proceedings against the bankrupt except with the leave of the court and in such terms as the court may impose. (4) This section— (a) does not affect the right of a secured creditor to enforce his or her security; and (b) is subject to section 351 (enforcement procedures) and section 352 (limited right to distress). Bankrupt’s Estate Definition of bankrupt’s estate
313. (1) Subject to subsection (2), the bankrupt’s estate comprises—
(a) all assets belonging to or vested in the bankrupt at the date of the bankruptcy order; (b) assets claimed by the trustee under section 318 or 319; and (c) the capacity to exercise and to take proceedings for exercising all such powers in or over or in respect of assets as might have been exercised by the bankrupt for his or her own benefit at the date of the bankruptcy order. (2) Subsection (1) does not apply to— (a) assets held by the bankrupt on trust for any other person; (b) such tools, books, vehicles and other items of equipment as are necessary to the bankrupt for use personally by him or her in his or her employment or business; (c) such clothing, bedding, furniture, household equipment and provisions as are necessary for satisfying the basic domestic needs of the bankrupt and his or her family; and (d) any asset of the bankrupt which is excluded from his or her estate under any other enactment. (3) The assets comprised in a bankrupt’s estate are divisible amongst his or her creditors in accordance with this Part. (4) Assets comprised in a bankrupt’s estate are subject to the rights of any person other than the bankrupt in relation to those assets, whether as a secured creditor of the bankrupt or otherwise, but disregarding— (a) any rights given up under section 298(1)(a); and (b) any rights which have been otherwise given up in accordance with the rules. (5) Unless the context otherwise requires, a reference in this Part to the assets of the bankrupt means the assets comprised in the bankrupt’s estate.

LAW OF VIRGIN ISLANDS Insolvency Act 171 Revision Date: 1 Jan 2020 Acquisition by trustee of control of bankrupt’s estate
314. (1) A trustee shall forthwith after the making of a bankruptcy order take
possession of—
(a) all documents which relate to the bankrupt’s estate or affairs and which belong to him or her or are under his or her control, including documents which would be privileged from disclosure in any proceedings; and (b) all assets of the bankrupt that are capable of manual delivery. (2) A trustee is, in relation to and for the purposes of acquiring or retaining possession of the assets of the bankrupt, in the same position as a receiver of the assets appointed by the Court, and the Court may, on his or her application, enforce the acquisition or retention accordingly. (3) Where any part of the bankrupt’s estate consists of stock, shares or shares in a ship or any other assets transferable in the books of a company, office or person, the trustee may exercise the right to transfer the assets to the same extent as the bankrupt might have exercised it if he or she had not become bankrupt. (4) Where any part of the estate consists of things in action, they are deemed to have been assigned to the trustee. (5) Notice of the deemed assignment of things in action under subsection (4) need not be given except in so far as it is necessary, in a case where the deemed assignment is from the bankrupt himself or herself, for protecting the priority of the trustee. (Amended by Act 11 of 2004) Goods subject to pledge etc.
315. (1) Where any goods of a bankrupt are held by any person by way of
pledge, pawn or other security, the trustee of the bankrupt may, after giving notice of his or her intention to do so, inspect the goods. (2) Where a person receives a notice under subsection (1), he or she is not entitled to realise his or her security unless he or she has given the trustee a reasonable opportunity to inspect the goods and, if the goods are comprised in the estate of the bankrupt, to exercise the bankrupt’s right of redemption. Duties of bankrupt in relation to his assets and affairs
316. (1) Where a bankruptcy order has been made, the bankrupt shall—
(a) make discovery of and deliver to his or her trustee all the assets comprised in his estate that are in his or her possession or control; and (b) deliver to his or her trustee all documents in his or her possession or control which relate to his or her assets or affairs, including any documents which, in any proceedings, would be privileged from disclosure. (2) Where the bankrupt is unable to deliver any assets comprised in his or her estate to his trustee, the bankrupt shall do everything reasonably required by his or her trustee to protect those assets.

172 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (3) The bankrupt shall— (a) give his or her trustee such information concerning his or her assets and affairs; (b) attend on him or her at such times; and (c) do all such other things, as his or her trustee may reasonably require for the purposes of carrying out his or her functions under this Act. (4) If at any time after the time of the bankruptcy order any assets are acquired by, or devolve on, the bankrupt or there is an increase in the bankrupt’s income, he or she shall, within the prescribed time period, give the trustee notice of the assets or of the increased income. (5) Subsection (3) applies to a bankrupt after his or her discharge. (6) If the bankrupt without reasonable excuse fails to comply with any obligation imposed by this section, he or she commits an offence. Delivery up by other persons
317. (1) Any person who holds assets to the account of, or for, the bankrupt
shall pay or deliver to the trustee the assets in his or her possession or under his or her control unless he or she is, by law, entitled to retain the assets against the bankrupt or the trustee. (2) Any person who, without reasonable excuse, fails to comply with any obligation imposed by this section, commits an offence. After-acquired assets
318. (1) Subject to sections 313(2) and 321, the trustee may by notice in
writing served on the bankrupt claim for the bankrupt’s estate any assets which have been acquired by, or have devolved upon, the bankrupt after the date of the bankruptcy order but prior to the date of his discharge. (2) Subject to subsection (3), on the service of a notice under subsection (1) on the bankrupt, the assets to which the notice relates vest in the trustee as
part of the bankrupt’s estate and the trustee’s title to those assets relates back to
the time at which the assets were acquired by, or devolved upon, the bankrupt. (Amended by Act 11 of 2004) (3) Where, whether before or after service of a notice under this section— (a) a person acquires assets in good faith, for value and without notice of the bankruptcy, or (b) a banker enters into a transaction in good faith and without such notice, the trustee is not in respect of those assets or that transaction entitled by virtue of this section to any remedy against that person or banker, or any person whose title to any assets derives from that person or banker. (4) For the purposes of this section, a reference to “assets” does not include any asset which, as part of the bankrupt's income, may be the subject of an income payments order under section 322.

LAW OF VIRGIN ISLANDS Insolvency Act 173 Revision Date: 1 Jan 2020 Vesting in trustee of certain items of excess value
319. (1) Subject to section 321, where—
(a) assets are excluded from the bankrupt’s estate by virtue of section 313(2)(b) or (c), and (b) it appears to the trustee that the realisable value of those assets or any of them exceeds the cost of a reasonable replacement, the trustee may, by notice in writing served on the bankrupt, claim the asset or assets for the bankrupt’s estate. (2) On the service on the bankrupt of a notice under subsection (1), the assets to which the notice relates vest in the trustee as part of the bankrupt's estate; and, except against a purchaser in good faith, for value and without notice of the bankruptcy, the trustee’s title to those assets has relation back to the date of the bankruptcy order. (3) The trustee shall apply funds comprised in the estate to the purchase by or on behalf of the bankrupt of a reasonable replacement for any assets vested in him or her under this section and the duty imposed by this subsection has priority over the obligation of the trustee to distribute the estate. (4) For the purposes of this section, an asset is a reasonable replacement for another asset if it is reasonably adequate for meeting the needs met by the other asset. Money provided in lieu of sale
320. (1) A third party may offer the trustee a sum of money to enable the
bankrupt to be left in possession of assets which would otherwise vest in the trustee under section 319. (2) The trustee may accept an offer made under subsection (1) if he or she is satisfied that it is a reasonable offer and that the estate will benefit to the extent of the value of the assets in question less the cost of a reasonable replacement. (Substituted by Act 11 of 2004) Time limit for notice under sections 318 or 319
321. (1) Except with the leave of the Court, a notice may not be served—
(a) under section 318, after the end of the period of 42 days beginning with the day on which it first came to the knowledge of the trustee that the assets in question had been acquired by, or had devolved upon, the bankrupt; (b) under section 319, after the end of the period of 42 days beginning with the day on which the assets in question first came to the knowledge of the trustee. (Amended by Act 11 of 2004) (2) For the purposes of this section— (a) anything which comes to the knowledge of the trustee is deemed in relation to any successor of his or her as trustee to have come to the knowledge of the successor at the same time; and

174 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (b) anything which comes to the knowledge of a person before he or she is the trustee, otherwise than under paragraph (a), is deemed to come to his or her knowledge on his or her appointment taking effect. (Amended by Act 11 of 2004) Income payments orders
322. (1) The Court may, on the application of the trustee, make an income
payments order claiming for the bankrupt's estate so much of the income of the bankrupt during the period for which the order is in force as may be specified in the order. (2) The Court shall not make an income payments order the effect of which would be to reduce the income of the bankrupt below what appears to the Court to be necessary for meeting the reasonable domestic needs of the bankrupt and his family. (3) An income payments order shall, in respect of any payments of income to which it is to apply, either— (a) require the bankrupt to pay the trustee an amount equal to so much of that payment as is claimed by the order; or (b) require the person making the payment to pay so much of it as is so claimed to the trustee, instead of to the bankrupt. (4) (Repealed by Act 11 of 2004) (5) Sums received by the trustee under an income payments order form
part of the bankrupt's estate.
(6) Subject to section 379(1)(c)(i), an income payments order shall not be made after the discharge of the bankrupt, and if made before, shall not have effect after his or her discharge. (7) Subject to subsection (8), for the purposes of this section, the income of the bankrupt comprises every payment in the nature of income which is from time to time made to him or her or to which he or she from time to time becomes entitled, including any payment in respect of the carrying on of any business or in respect of any office or employment and any payment under a pension scheme. (8) The Rules may provide that pension payments paid to the bankrupt up to a maximum amount specified in the Rules are exempt from subsection (7). (Inserted by Act 11 of 2004) Bankruptcy Trustee Bankruptcy trustee officer of Court
323. In performing his or her functions and undertaking his or her duties under
this Act, a bankruptcy trustee acts as an officer of the Court. General duties of trustee
324. (1) The principal duties of a trustee are—

LAW OF VIRGIN ISLANDS Insolvency Act 175 Revision Date: 1 Jan 2020 (a) to take possession of, protect and realise the bankrupt’s estate; and (b) to distribute the bankrupt’s estate in accordance with this Act. (2) Where the trustee is not the Official Receiver, he or she has a duty— (a) to provide the Official Receiver with such information, (b) to produce to the Official Receiver, and permit inspection by the Official Receiver of, such documents, and (c) to give the Official Receiver such other assistance, as the Official Receiver may reasonably require for the purpose of enabling him or her to carry out his functions in relation to the bankruptcy. (3) A trustee shall, subject to this Act and the Rules, use his or her own discretion in undertaking his duties. (3A) If it appears to the trustee that the bankrupt is carrying on or has carried on unlicensed financial services business— (a) he or she shall, as soon as reasonably practicable, report the matter to the Commission; and (b) for the purposes of subsection (3B), he or she shall treat the bankrupt as a regulated person. (Inserted by Act 11 of 2004) (3B) Where the bankrupt is or has been a regulated person, the trustee shall— (a) send to the Commission a copy of every notice or other document that he or she is required to file with the Court or to send to a creditor of the bankrupt; and (b) unless the applicant is the Commission, give the Commission notice of any application made to the Court with respect to the bankruptcy, whether the application is made by him or her or by some other person. (Inserted by Act 11 of 2004) (4) A trustee also has the other duties imposed by this Act and the Rules and such duties as may be imposed by the Court. Powers of trustee
325. (1) A trustee may—
(a) with the permission of the creditors' committee or court, exercise any of the powers specified in Part 1 of Schedule 4; and Schedule 4 (b) without that permission, exercise any of the general powers specified in Part 2 of Schedule 4. (2) With the permission of the creditors' committee or the court, the trustee may appoint the bankrupt— (a) to superintend the management of his or her estate or any part of it;

176 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (b) to carry on his or her business, if any, for the benefit of his or her creditors; or (c) in any other respect to assist in administering the estate in such manner and on such terms as the trustee may direct. (3) A permission given for the purposes of subsection (1)(a) or (2) shall not be a general permission but shall relate to a particular proposed exercise of the power in question and a person dealing with the trustee in good faith and for value is not to be concerned to enquire whether any permission required in either case has been given. (4) Subject to subsection (5), where the trustee has done anything without the permission required by subsection (1)(a) or (2), the Court or the creditors' committee may, for the purpose of enabling him or her to meet his or her expenses out of the bankrupt's estate, ratify what the trustee has done. (5) The creditors’ committee shall not ratify the trustee’s actions under subsection (4) unless it is satisfied that the trustee acted in a case of urgency and sought the committee’s ratification without undue delay. (6) Part 3 of Schedule 4 has effect with respect to the things which the trustee is able to do for the purposes of, or in connection with, the exercise of any of his or her powers under this Part. (7) Where the trustee, not being the Official Receiver, in exercise of the powers conferred on him or her by any provision in this Part— (a) disposes of any asset comprised in the bankrupt's estate to an associate of the bankrupt, or (b) employs a solicitor, he or she shall give notice to any creditors’ committee of that exercise of his or her powers. (8) Nothing in this Act is to be construed as restricting the capacity of the trustee to exercise any of his or her powers outside the Virgin Islands. (9) The acts of the trustee of a bankrupt are valid notwithstanding any defect in his or her nomination, appointment or qualifications. (Inserted by Act 11 of 2004) Notice of appointment
326. (1) A trustee shall, within 14 days of the date of his or her appointment—
(a) advertise his or her appointment in accordance with the Rules; (Substituted by Act 11 of 2004) (b) serve notice of his or her appointment on the bankrupt; (c) if he or she has been appointed in respect of an individual who is a regulated person, serve notice of his or her appointment on the Commission; (d) send a notice of his or her appointment to every creditor of the bankrupt; and (e) unless the Official Receiver is the trustee, file notice of his or her appointment with the Official Receiver.

LAW OF VIRGIN ISLANDS Insolvency Act 177 Revision Date: 1 Jan 2020 (2) An advertisement under subsection (1)(a) and a notice under subsection (1)(d) shall set out the powers of the creditors under this Part to require him or her to call a meeting of creditors. (3) A trustee who contravenes subsection (1) or (2) commits an offence. Appointment of trustee in place of Official Receiver
327. (1) When the Official Receiver is the trustee of a bankrupt's estate the
Court may, on his or her application, appoint an eligible insolvency practitioner to act as trustee in his or her place. (2) An application may be made under subsection (1) notwithstanding that the Court has refused to make an appointment on a previous application by the Official Receiver. Removal of trustee
328. (1) The Court may, on application by a person specified in subsection (2)
or on its own motion, remove a trustee from office if— (a) the trustee— (i) is not eligible to act as an insolvency practitioner in relation to the bankrupt; (ii) breaches any duty or obligation imposed on him or her by or owed by him or her under this Act, the Rules or the Regulations made under section 486 or, in his or her capacity as trustee, under any other enactment or law in the Virgin Islands; or (Amended by Act 11 of 2004) (iii) fails to comply with any direction or order of the Court made in relation to the bankruptcy; or (b) the Court is satisfied that— (i) the trustee’s conduct of the bankruptcy is below the standard that may be expected of a reasonably competent trustee; (ii) the trustee has an interest that conflicts with his or her role as trustee; or (iii) that for some other reason he or she should be removed as trustee. (2) An application to the Court to remove a trustee from office may be made by— (a) the creditors’ committee, if any; (b) a creditor of the bankrupt; or (c) the Official Receiver. (3) Where the Court removes a trustee from office under this section— (a) if, following his or her removal, there is at least one trustee remaining in office, the Court may appoint an eligible insolvency practitioner as trustee in his or her place; or (Amended by Act 11 of 2004)

178 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (b) if the trustee removed was the sole trustee of the bankrupt, the Court shall appoint the Official Receiver or an eligible insolvency practitioner as trustee in his or her place. (Amended by Act 11 of 2004) (4) On the hearing of an application under this section, the Court may make any interim or other order it considers fit. Resignation of trustee
329. (1) A trustee—
(a) shall resign if he or she is no longer eligible to act as an insolvency practitioner in relation to the bankrupt; but (b) otherwise may only resign in accordance with this section. (2) Where a trustee resigns under subsection (1)(a), he or she shall send a notice of his or her resignation, to the creditors of the bankrupt and to the Official Receiver, who shall file a copy of the notice with the Court, and his or her resignation takes effect from the date that the notice is filed by the Official Receiver with the Court. (Amended by Act 11 of 2004) (3) A trustee may resign in accordance with subsection (5)— (a) if he or she intends to cease to be in practice as an insolvency practitioner; (b) if there is some conflict of interest or change of personal circumstances that precludes or makes impracticable the further discharge by him or her of his or her duties; or (c) on the grounds of ill health. (4) Notwithstanding subsection (3), where joint trustees are appointed, one or more of the joint trustees may resign in accordance with subsection (5) if— (a) all the joint trustees are of the opinion that it is no longer necessary or expedient for the resigning trustee or trustees to continue in office; and (b) at least one of them will remain in office. (Amended by Act 11 of 2004) (5) Where a trustee intends to resign on one of the grounds referred to in subsection (3) or under subsection (4), he or she shall call a meeting of creditors for the purpose of accepting his or her resignation as trustee. (6) If, at the meeting called under subsection (5), the creditors resolve to accept the resignation of the trustee, he or she shall send a notice of his or her resignation to the creditors of the bankrupt and to the Official Receiver, who shall file a copy of the notice with the Court, and his or her resignation takes effect from the date that the notice is filed by the Official Receiver with the Court. (Amended by Act 11 of 2004) (6A) If the creditors refuse or fail to accept the resignation of the trustee, he or she may apply to the Court for leave to resign in accordance with the Rules. (Inserted by Act 11 of 2004)

LAW OF VIRGIN ISLANDS Insolvency Act 179 Revision Date: 1 Jan 2020 (7) This section does not apply to the Official Receiver when acting as the trustee of a bankrupt. Appointment of replacement trustee
330. (1) Where a trustee dies or resigns under section 329, the Court, on the
application of a person specified in subsection (2) or on its own motion— (a) if there is at least one trustee remaining in place, may appoint an eligible insolvency practitioner as trustee in his or her place; or (b) if the trustee who has died or resigned was the sole trustee of the bankrupt, shall appoint the Official Receiver or an eligible insolvency practitioner in his or her place. (Substituted by Act 11 of 2004) (2) An application under subsection (1) may be made— (a) by any continuing trustee; (b) by the creditors’ committee, if any; or (c) by the Official Receiver. (3) Where there is a vacancy in the office of trustee, for whatever reason, the Official Receiver is trustee until the vacancy is filled. Remuneration of trustee
331. The remuneration payable to a trustee shall be fixed applying the
principles specified in section 432. (Amended by Act 11 of 2004) General control of trustee by the Court
332. (1) A person aggrieved by an act, omission or decision of a trustee may
apply to the Court and the Court may confirm, reverse or modify the act, omission or decision of the trustee. (2) A trustee may apply to the Court for directions in relation to any particular matter arising under the bankruptcy. Administration by Trustee Meetings of creditors
333. (1) A trustee may at any time call a meeting of the creditors of the
bankrupt—
(a) by sending a notice of the meeting by post to every creditor not less than 7 days before the date upon which the meeting is to be held; and (b) by advertising the meeting. (2) Notwithstanding subsection (1), the trustee shall call a meeting of creditors if— (a) a meeting is requisitioned by the creditors of the bankrupt in accordance with subsection (3); or

180 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (b) he or she is directed to do so by the Court. (3) A creditors’ meeting may be requisitioned in accordance with the Rules by 25% in value of the creditors of the bankrupt. (4) The trustee may, if he or she considers it appropriate, by written notice, require the bankrupt to attend a creditors’ meeting called under this
section. (Inserted by Act 11 of 2004)
(5) The bankrupt commits an offence if— (a) he or she receives a notice to attend a creditors’ meeting under subsection (4); and (b) without reasonable excuse, he or she fails to attend the meeting. (Inserted by Act 11 of 2004) Claims and Distribution of Estate Distribution of bankrupt’s estate
334. (1) The bankrupt’s estate shall be applied—
(a) in paying, in priority to all other claims, the costs and expenses properly incurred in the bankruptcy in accordance with the prescribed priority; (b) after payment of the costs and expenses of the bankruptcy, in paying the preferential claims admitted by the trustee in accordance with the provisions for the payment of preferential claims prescribed; (c) after payment of the preferential claims, in paying all other claims admitted by the trustee; and (d) after paying all admitted claims, in paying any interest payable under section 342. (2) Subject to section 151, the claims referred to in subsection (1)(c) rank equally and, if the bankrupt’s estate is insufficient to meet them all in full, they shall be paid rateably. (Amended by Act 11 of 2004) Debts to spouse
335. Any claims in respect of credit provided by a person who was the
bankrupt’s spouse at the time of the bankruptcy order, whether or not he or she was the bankrupt’s spouse at the time the credit was provided— (a) rank in priority after the debts and interest specified in section 334(1); and (b) are payable with interest at the rate specified in section 334(1)(d) in respect of the period during which they have been outstanding since the date of the bankruptcy order, and the interest payable under paragraph (b) has the same priority as the debts on which it is payable.

LAW OF VIRGIN ISLANDS Insolvency Act 181 Revision Date: 1 Jan 2020 Claims by unsecured creditors
336. (1) An unsecured creditor may make a claim in the bankruptcy of an
individual by submitting to the trustee a written claim, signed by him or her or on his or her behalf. (2) The trustee may require an unsecured creditor who intends to submit, or who has submitted, a claim under subsection (1)— (a) to verify his or her claim by affidavit; (b) to provide further particulars of his or her claim; or (c) to provide him or her with documentary or other evidence to substantiate the claim. (3) Subject to subsection (7), as soon as reasonably practicable after receiving a claim under subsection (1) from a creditor who has complied with any requirements that the trustee may have imposed under subsection (2), the trustee shall either admit or reject the claim in whole or in part. (Amended by Act 11 of 2004) (4) If the trustee rejects the claim, whether in whole or in part, he or she shall as soon as practicable provide the creditor with a notice of rejection in which the reasons for the rejection of the claim shall be specified. (5) Unless the Court otherwise orders, a creditor shall bear the costs of making a claim under this section, including the costs of complying with any requirements imposed by the trustee under subsection (2). (6) The trustee shall not admit a claim in the bankruptcy unless it has been made in accordance with this section. (6A) The trustee is not required to admit or reject claims under subsection (3) at any time when it appears to him or her that there are insufficient assets in the bankrupt’s estate to enable a distribution to be made to unsecured creditors. (Inserted by Act 11 of 2004) (7) A person who makes or authorises the making of a claim under this
section knowing that—
(a) the claim is false or misleading in a material matter; or (b) a material fact or matter has been omitted from the claim, commits an offence. Variation, withdrawal and expunging of claims
337. (1) A claim made under section 336 may—
(a) be amended or withdrawn by the creditor at any time before the trustee has admitted it; and (b) be amended or withdrawn by agreement between the creditor and the trustee at any time after the trustee has admitted it. (2) The Court, on the application of the trustee or, where the trustee declines to make application under this subsection, a creditor, may expunge or amend an admitted claim if it is satisfied that the claim should not have been admitted or should be reduced.

182 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS Claims by secured creditors
338. (1) A secured creditor may—
(a) value the assets subject to the security interest and claim in the bankruptcy as an unsecured creditor for the balance of his or her debt; or (b) surrender his or her security interest to the trustee for the general benefit of creditors and claim in the bankruptcy as an unsecured creditor for the whole of his or her debt, but he or she is not obliged to do either. (2) A secured creditor may, at any time apply to the trustee to amend the value that he or she placed on the security interest in his or her claim. (3) If, on receiving an application under subsection (2), the trustee is satisfied that— (a) the value placed on the security interest was an estimate made in good faith on a mistaken basis; or (b) the value of the security interest has subsequently changed, he or she may permit the secured creditor to amend the value that he or she places on the security interest. (4) If the trustee is dissatisfied with the value placed on a security interest by a secured creditor, whether under subsection (1)(a) or on an amendment under subsection (3), he or she may require the assets comprised in the security interest to be offered for sale. (5) A sale under subsection (4) is to be on such terms and conditions as are agreed by the secured creditor and the trustee or, in default, as the Court determines. (6) If assets are offered for sale by public auction, both the secured creditor and the trustee are entitled to bid for and purchase them. Redemption of security interest by trustee
339. (1) Where a secured creditor has claimed in a bankruptcy under section
338(1)(a), the trustee may at any time give notice to the creditor that he or she proposes at the expiration of 28 days from the date of the notice to redeem the security interest at the value placed on it by the creditor. (2) A secured creditor who receives a notice under subsection (1) may, within 21 days of the date of the notice, apply to the trustee to revise the value that he or she places on the security interest in accordance with section 338(2). (3) At the expiration of 28 days from the date of the notice under subsection (1), the trustee may redeem the security interest at the value placed on it by the creditor unless— (a) the secured creditor has applied to the trustee to amend the value that he or she places on the security interest and that application has not been determined; or (b) the secured creditor has appealed to the Court against the refusal of the trustee to permit him or her to amend the value that he or

LAW OF VIRGIN ISLANDS Insolvency Act 183 Revision Date: 1 Jan 2020 she places on his or her security interest, and that appeal has not been determined. (4) Where, subsequent to a notice to redeem issued under subsection (1), the value placed by the secured creditor on his or her security interest is amended, whether with the consent of the trustee or on appeal to the Court, the trustee may only redeem the security interest at the new value. (5) A secured creditor may, by serving a notice to elect on the trustee, require him or her to elect whether or not to exercise his or her power to redeem under this section. (6) Where a notice to elect is served on a trustee under subsection (5), he or she is not entitled to redeem the security interest unless he or she does so within six months of the date of service of the notice on him or her or within such extended period as the Court may allow. Realisation of security interest by secured creditor
340. (1) Where a secured creditor realises his or her security interest and there
is a surplus remaining from the net amount realised after satisfaction of the debt secured, he or she shall account to the trustee for the surplus, after making any proper payments to the holder of any other security interest over the assets subject to that charge. (2) Where a secured creditor realises his or her security interest and the net amount realised is not sufficient to satisfy the debt secured— (a) if the creditor has previously valued his or her security interest and claimed in the bankruptcy for the balance under section 338(1)(a), the net amount realised is substituted for the value previously placed by the creditor on the security interest; or (Amended by Act 11 of 2004) (b) in any other case, the creditor may claim in the bankruptcy as an unsecured creditor for the balance of his or her debt. (3) For the purposes of this section, the secured debt includes contractual interest payable to the secured creditor on the debt up to the time of its satisfaction. (Amended by Act 11 of 2004) Surrender for non-disclosure
341. (1) Subject to subsection (2), if a secured creditor omits to disclose his or
her security interest when submitting a claim in a bankruptcy, he or she shall surrender his or her security interest for the general benefit of the creditors. (2) The Court may, on application by a secured creditor who is required to surrender his or her security interest under subsection (1), if it is satisfied that the omission was inadvertent or the result of an honest mistake by order direct— (a) that he or she is not required to surrender his or her security interest; and (b) that he or she values his or her security interest and amends his or her claim accordingly.

184 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS Interest after commencement of bankruptcy
342. (1) Interest is payable on any claim in a bankruptcy in respect of the
period after the commencement of the bankruptcy in accordance with this
section.
(2) Any surplus remaining after the payment of all claims in the bankruptcy shall, before being applied for any other purpose, be applied in paying interest on those claims in respect of the periods during which they have been unpaid since the commencement of the bankruptcy. (3) Subject to section 151, all interest payable under this section ranks equally, whether or not the claims on which it is payable rank equally. (Substituted by Act 11 of 2004) (4) The rate of interest payable under this section is the greater of— (a) the court rate; and (b) the rate that would be applicable to the claim if a bankruptcy order had not been made. Distribution by means of dividend
343. (1) Whenever the trustee has sufficient funds in hand for the purpose, he
or she shall, subject to the retention of such sums as may be necessary for his or her remuneration and the other costs and expenses of the bankruptcy, distribute dividends among the creditors whose claims he or she has admitted. (Amended by Act 11 of 2004) (2) Before distributing a dividend under subsection (1), the trustee shall send each creditor a notice— (a) stating that he or she intends to distribute a dividend; and (b) fixing a date on or before which creditors shall submit their claims to him or her. (Substituted by Act 11 of 2004) (3) (Repealed by Act 11 of 2004) (4) (Repealed by Act 11 of 2004) (5) In determining the funds available for distribution to creditors by way of a dividend, the trustee shall make provision— (a) for any admissible debts which appear to him or her to be due to persons who, by reason of the distance of their place of residence, may not have had sufficient time to submit their claims; (b) for any admissible debts which are the subject of claims which have not yet been determined; and (c) for disputed claims. (Amended by Act 11 of 2004)

LAW OF VIRGIN ISLANDS Insolvency Act 185 Revision Date: 1 Jan 2020 Claims by unsatisfied creditors
344. (1) A creditor who has not submitted his or her claim by the date fixed in
the notice issued under section 343(2) is not entitled to disturb, by reason that he or she has not participated in it, the distribution of that dividend, but— (a) when that claim has been admitted, he or she is entitled to be paid out of any money for the time being available for the payment of any further dividend, any dividend or dividends which he or she has failed to receive; and (b) any dividend or dividends payable under paragraph (a) shall be paid before that money is applied to the payment of any such further dividend. (Amended by Act 11 of 2004) (2) Subject to section 346, where the trustee makes more than one distribution, section 343 and subsection (1) of this section apply to each distribution. (Inserted by Act 11 of 2004) Distribution of assets in specie
345. (1) Without prejudice to the provisions in this Act concerning disclaimer,
the trustee may, with the permission of the creditors' committee or the Court, divide in their existing form amongst the bankrupt's creditors, according to their estimated value, any assets which from their peculiar nature or other special circumstances cannot be readily or advantageously sold. (2) A permission given for the purposes of subsection (1) shall not be a general permission but shall relate to a particular proposed exercise of the power in question and a person dealing with the trustee in good faith and for value is not to be concerned to enquire whether any permission required by subsection (1) has been given. (3) Subject to subsection (4), where the trustee has done anything without the permission required by subsection (1), the Court or the creditors' committee may, for the purpose of enabling him or her to meet his or her expenses out of the bankrupt's estate, ratify what the trustee has done. (4) The committee may only ratify the trustee’s actions under subsection (3) if it is satisfied that the trustee acted in a case of urgency and that he or she has sought its ratification without undue delay. Final distribution
346. (1) When the trustee has realised all the bankrupt’s estate or so much of it
as can, in the trustee’s opinion, be realised without needlessly protracting the bankruptcy, he or she shall give notice in the prescribed manner either— (a) of his or her intention to distribute a final dividend; or (Amended by Act 11 of 2004) (b) that no dividend, or further dividend, will be distributed. (Substituted by Act 11 of 2004) (2) A notice given under subsection (1) shall require claims against the bankrupt’s estate to be established by a date specified in the notice (referred to in this section as “the final date”).

186 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (3) The Court may, on the application of any person, postpone the final date. (4) After the final date, the trustee shall— (a) defray any outstanding expenses of the bankruptcy out of the bankrupt’s estate; and (b) if he or she intends to distribute a final dividend, distribute that dividend without regard to the claim of any person in respect of a claim not already admitted in the bankruptcy. (Substituted by Act 11 of 2004) No action for dividend
347. No action lies against the trustee for a dividend, but if the trustee refuses
to pay a dividend the Court may, if it thinks fit, order him or her to pay it and also to pay out of his or her own money— (a) interest on the dividend at the Court rate from the time it was withheld; and (b) the costs of the application. Right of bankrupt to surplus
348. (1) Subject to subsection (2), the bankrupt is entitled to any surplus
remaining after payment in full of the costs, expenses and claims referred to in
section 334(1).
(2) The Court may make an order directing the trustee not to distribute the surplus or any part of it to the bankrupt if, on the application of the Attorney General, it is satisfied that— (a) proceedings under any enactment dealing with the confiscation of the proceeds of crime are pending; and (b) the assets of the bankrupt may become subject to a confiscation order or to be required to meet some other order made in those proceedings. (3) The Court may, on the application of the Attorney General or the bankrupt vary or revoke an order made under subsection (2). Final meeting
349. (1) Where it appears to the trustee that the administration of the
bankrupt’s estate in accordance with this Act is for practical purposes complete and the trustee is not the Official Receiver, he or she shall call a final general meeting of the bankrupt’s creditors to receive the trustee’s report of his or her administration of the bankrupt’s estate. (2) The trustee may, if he or she thinks fit, call the final general meeting at the same time as giving notice under section 346 but, if called for an earlier date, the meeting shall be adjourned (and, if necessary, further adjourned) until a date on which the trustee is able to report to the meeting that the administration of the bankrupt’s estate is for practical purposes complete.

LAW OF VIRGIN ISLANDS Insolvency Act 187 Revision Date: 1 Jan 2020 (3) In the administration of the estate it is the trustee’s duty to retain sufficient sums from the estate to cover the expenses of summoning and holding the meeting required by this section. Prior Transactions Contracts to which bankrupt is a party
350. (1) Where a contract has been made with a person who subsequently
becomes bankrupt, the Court may, on the application of any other party to the contract, make an order discharging obligations under the contract on such terms as to payment by the applicant or the bankrupt of damages for non-performance or otherwise as appear to the Court to be equitable. (2) Any damages payable by the bankrupt by virtue of an order of the Court under this section are provable as a bankruptcy debt. (3) Where an undischarged bankrupt is a contractor in respect of any contract jointly with any person, that person may sue or be sued in respect of the contract without the joinder of the bankrupt. Enforcements procedures
351. (1) Subject to section 312 and to this section, where the creditor of a
bankrupt has, before the commencement of that bankruptcy— (a) issued execution against the goods or land of the bankrupt; or (b) attached a debt due to the bankrupt from another person, the creditor is not entitled, as against the bankruptcy trustee, to retain the benefit of the execution or attachment, or any sums paid to avoid it, unless the execution or attachment was completed, or the sums were paid, before the commencement of the bankruptcy. (2) Where any goods of a person have been taken in execution, then, if before the completion of the execution notice is given to the officer charged with the execution that a bankruptcy order has been made against that person— (a) that officer shall on request deliver the goods and any money seized or recovered in part satisfaction of the execution to the trustee; but (b) the costs of the execution are a first charge on the goods or money so delivered and the trustee may sell the goods or a sufficient part of them for the purpose of satisfying the charge. (Amended by Act 11 of 2004) (3) Subject to subsection (6) below, where— (a) under an execution in respect of a judgment for a sum exceeding such sum as may be prescribed for the purposes of this subsection, the goods of any person are sold or money is paid in order to avoid a sale; and (b) before the end of the period of 14 days beginning with the day of the sale or payment the officer charged with the execution is

188 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS given notice that a bankruptcy application has been filed in relation to that person; and (c) a bankruptcy order is or has been made on that application, the balance of the proceeds of sale or money paid, after deducting the costs of execution, shall (in priority to the claim of the execution creditor) be comprised in the bankrupt’s estate. (4) Accordingly, in the case of an execution in respect of a judgment for a sum exceeding the sum prescribed for the purposes of subsection (3), the officer charged with the execution shall— (a) not dispose of the balance mentioned in subsection (3) at any time within the period of 14 days so mentioned or while there is pending an application for a bankruptcy order of which he or she has been given notice under that subsection; and (Amended by Act 11 of 2004) (b) pay that balance, where by virtue of that subsection it is comprised in the bankrupt’s estate, to the trustee. (5) For the purposes of this section— (a) an execution against goods is completed by seizure and sale; (b) an execution against land is completed by seizure or by the appointment of a receiver; (c) an attachment of a debt is completed by the receipt of the debt. (6) The rights conferred by subsections (1) to (3) on the trustee may, to such extent and on such terms as it thinks fit, be set aside by the court in favour of the creditor who has issued the execution or attached the debt. (7) Nothing in this section entitles the trustee to claim goods from a person who has acquired them in good faith under a sale by an officer charged with an execution. (8) Neither subsection (2) nor subsection (3) applies in relation to any execution against assets which have been acquired by or have devolved upon the bankrupt since the commencement of the bankruptcy unless, at the time the execution is issued or before it is completed— (a) the assets have been or are claimed for the bankrupt's estate under
section 318 (after-acquired assets); and
(b) a copy of the notice given under that section has been or is served on the officer charged with the execution. Distress, etc.
352. (1) The right of any landlord or other person to whom rent is payable to
distrain upon the goods and effects of an undischarged bankrupt for rent due to him or her from the bankrupt is available (subject to subsection (5) below) against goods and effects comprised in the bankrupt’s estate, but only for 6 months’ rent accrued due before the commencement of the bankruptcy. (2) Where a landlord or other person to whom rent is payable has distrained for rent upon the goods and effects of an individual to whom a

LAW OF VIRGIN ISLANDS Insolvency Act 189 Revision Date: 1 Jan 2020 bankruptcy application relates and a bankruptcy order is subsequently made on that application, any amount recovered by way of that distress which— (a) is in excess of the amount which by virtue of subsection (1) would have been recoverable after the commencement of the bankruptcy, or (b) is in respect of rent for a period or part of a period after the distress was levied, shall be held for the bankrupt as part of his or her estate. (3) Where any person (whether or not a landlord or person entitled to rent) has distrained upon the goods or effects of an individual against whom a bankruptcy order is made before the end of the period of 3 months beginning with the distraint, so much of those goods or effects, or the proceeds of their sale, as is not held for the bankrupt under subsection (2) shall be charged for the benefit of the bankrupt’s estate with the preferential debts of the bankrupt to the extent that the bankrupt’s estate is for the time being insufficient for meeting those debts. (Amended by Act 11 of 2004) (4) Where by virtue of any charge under subsection (3) any person surrenders any goods or effects to the trustee of a bankrupt’s estate or makes a payment to such a trustee, that person ranks, in respect of the amount of the proceeds of the sale of those goods or effects by the trustee or, as the case may be, the amount of payment, as a preferential creditor of the bankrupt, except as against so much of the bankrupt’s estate as is available for the payment of preferential creditors by virtue of the surrender of payment. (5) A landlord or other person to whom rent is payable is not at any time after the discharge of a bankrupt entitled to distrain upon any goods or effects comprised in the bankrupt’s estate. (6) Nothing in this Part affects any right to distrain otherwise than for rent, and any such right is at any time exercisable without restriction against assets comprised in a bankrupt’s estate, even if that right is expressed by any enactment to be exercisable in like manner as a right to distrain for rent. (7) Any right to distrain against assets comprised in a bankrupt’s estate is exercisable notwithstanding that the assets have vested in the trustee. (8) The provisions of this section are without prejudice to a landlord’s right in a bankruptcy to claim for any bankruptcy debt in respect of rent. (Amended by Act 11 of 2004) Unenforceability of liens on books, etc.
353. (1) A lien or other right to retain possession of any of the books, papers
or other records of a bankrupt is unenforceable to the extent that such enforcement would deny possession of any books, papers or other records to the Official Receiver or the trustee of the bankrupt’s estate. (Amended by Act 11 of 2004) (2) Subsection (1) does not apply to a lien on documents which give a title to assets and are held as such.

190 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS General Powers of Court General control of Court
354. (1) Every bankruptcy is under the general control of the Court and,
subject to anything to the contrary in this Act, the Court has full power to decide all questions of priorities and all other questions, whether of law or fact, arising in any bankruptcy. (2) Without limiting this Part, an undischarged bankrupt or a discharged bankrupt whose estate is still being administered shall do all such things as he or she may be directed to do by the Court for the purposes of his or her bankruptcy or, as the case may be, the administration of that estate. (3) The Official Receiver or the trustee of a bankrupt’s estate may at any time apply to the court for a direction under subsection (2). (4) A person who without reasonable excuse fails to comply with any obligation imposed on him or her by subsection (2) commits an offence. Power of arrest
355. (1) In the cases specified in subsection (2) the Court may cause a warrant
to be issued to a police officer or a prescribed officer of the Court— (a) for the arrest of a debtor to whom an application for a bankruptcy order relates or of an undischarged bankrupt, or of a discharged bankrupt whose estate is still being administered; and (Amended by Act 11 of 2004) (b) for the seizure of any documents, money or goods in possession of a person arrested under the warrant, and may authorise a person arrested under such a warrant to be kept in custody, and anything seized under such a warrant to be held, in accordance with the Rules, until such time as the court may order. (Amended by Act 11 of 2004) (2) The powers conferred by subsection (1) are exercisable in relation to a debtor or undischarged or discharged bankrupt if, at any time after the filing of the application for a bankruptcy order or the making of the bankruptcy order against him or her, it appears to the Court— (a) that there are reasonable grounds for believing that he or she has absconded, or is about to abscond, with a view to avoiding or delaying the payment of any of his or her debts or his or her appearance to an application for a bankruptcy order or to avoiding, delaying or disrupting any proceedings in bankruptcy against him or her or any examination of his or her affairs; (b) that he or she is about to remove his or her goods with a view to preventing or delaying possession being taken of them by the trustee; (c) that there are reasonable grounds for believing that he or she has concealed or destroyed, or is about to conceal or destroy, any of his or her assets or any documents which might be of use to his or

LAW OF VIRGIN ISLANDS Insolvency Act 191 Revision Date: 1 Jan 2020 her creditors in the course of his or her bankruptcy or in connection with the administration of his or her estate; (d) that he or she has, without the leave of his or her trustee, removed any assets in his or her possession which exceed in value such sum as may be prescribed for the purpose of this paragraph; or (e) that he or she has failed, without reasonable excuse, to attend any examination ordered by the Court. (Amended by Act 11 of 2004) Seizure of bankrupt’s assets
356. (1) At any time after a bankruptcy order has been made, the Court may,
on the application of the Official Receiver or the trustee of the bankrupt’s estate, issue a warrant authorising the person to whom it is directed to seize any assets comprised in the bankrupt’s estate which is, or any documents or records relating to the bankrupt’s estate or affairs which are, in the possession or under the control of the bankrupt or any other person who is required to deliver the assets, books, papers or records to the Official Receiver or trustee. (Amended by Act 11 of 2004) (2) Any person executing a warrant under this section may, for the purpose of seizing any assets comprised in the bankrupt’s estate or any documents relating to the bankrupt’s estate or affairs, break open any premises where the bankrupt or anything that may be seized under the warrant is or is believed to be and any receptacle of the bankrupt which contains or is believed to contain anything that may be so seized. (3) If, after a bankruptcy order has been made, the Court is satisfied that any assets comprised in the bankrupt’s estate or any documents relating to the bankrupt’s estate or affairs are concealed in any premises not belonging to him or her, it may issue a warrant authorising any police officer or prescribed officer of the Court to search those premises for the assets or documents. (4) A warrant under subsection (3) shall not be executed except in the prescribed manner and in accordance with its terms. Re-direction of bankrupt’s letters, etc.
357. (1) Where a bankruptcy order has been made, the Court may from time to
time, on the application of the trustee of the bankrupt’s estate, order the Post Office to re-direct and send or deliver to the trustee or otherwise any mail which would otherwise be sent or delivered to the bankrupt at such place or places as may be specified by the order. (2) An order under this section has effect for such period, not exceeding 3 months, as may be specified in the order.

192 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS Disclaimer Trustee may disclaim onerous property
358. (1) For the purposes of this section, “onerous property” means—
(a) an unprofitable contract; or
(b) an asset comprised in the bankrupt’s estate which is unsaleable or not readily saleable, or which may give rise to a liability to pay money or perform an onerous act. (2) Subject to sections 360 and 361(2), a trustee may, by filing a notice of disclaimer with the Court, disclaim any onerous property comprised in the bankrupt’s estate even though he or she has taken possession of it, tried to sell or assign it or otherwise exercised rights of ownership in relation to it. (3) A trustee who disclaims onerous property shall, within 14 days of the date on which the disclaimer notice is filed, give notice to every person whose rights are, to his or her knowledge, affected by the disclaimer. (4) A trustee who contravenes subsection (3) commits an offence. When disclaimer takes effect
359. (1) Subject to subsections (2) and (4), a disclaimer takes effect on the
date when the notice of disclaimer is filed at Court.
(2) The disclaimer of property of a leasehold nature does not take effect unless a copy of the disclaimer notice has been given, so far as the trustee is aware of their addresses, to every person claiming under the bankrupt as underlessee or mortgagee and either— (a) no application for a vesting order is made under section 362 with respect to that property before the end of a period of 14 days beginning with the day on which the last notice under this subsection was given; or (b) where such an application is made, the Court directs that the disclaimer is to take effect. (3) Where the Court gives a direction under subsection (2)(b), it may also, instead of or in addition to any order it makes under section 362, make such orders with respect to fixtures, tenant’s improvements and other matters arising out of the lease as it considers fit. (4) Without prejudice to subsections (1) to (3), the disclaimer of any property in a dwelling house does not take effect unless a copy of the disclaimer notice has been given, so far as the trustee is aware of their addresses, to every person in occupation of or claiming a right to occupy the dwelling house and either— (a) no application under section 362 is made with respect to the property before the end of a period of 14 days beginning with the day on which the last notice under this subsection was given; or (b) where such an application is made, the Court directs that the disclaimer is to take effect.

LAW OF VIRGIN ISLANDS Insolvency Act 193 Revision Date: 1 Jan 2020 Notice to trustee to elect whether to disclaim
360. (1) A person interested in property or whose rights would be effected by
the disclaimer of property may, by serving a notice to elect on the trustee, require him or her to elect whether or not to disclaim the property. (2) Where a notice to elect is served on a trustee, he or she is not entitled to disclaim the property under section 358 unless he or she does so within 28 days of the date of service of the notice on him or her or within such extended period as the Court may allow. (3) The trustee is deemed to have adopted any contract which by virtue of this section he or she is not entitled to disclaim. Effect of disclaimer
361. (1) Subject to subsection (2), a disclaimer of onerous property under
section 358—
(a) operates so as to determine, with effect from the date of the disclaimer, the rights, interests and liabilities of the bankrupt and his or her estate in or in respect of the property disclaimed; and (b) discharges the trustee from all personal liability in respect of that property as from the date of his or her appointment, but, except so far as is necessary to release the bankrupt, the bankrupt’s estate and the trustee from liability, does not affect the rights or liabilities of any other person. (2) A notice of disclaimer shall not be given under section 358 in respect of any property that has been claimed for the estate under section 318 (afteracquired property) or 319 (personal property of bankrupt exceeding reasonable replacement value), except with the leave of the court. (3) A person suffering loss or damage as a result of a disclaimer of onerous property under section 358 may claim in the bankruptcy of the bankrupt as a creditor for the amount of the loss or damage. Vesting orders and orders for delivery
362. (1) Subject to section 363, if a trustee disclaims onerous property under
section 358, the Court may make an order under subsection (2) on the
application of—
(a) a person who claims an interest in the disclaimed property; (b) a person who is under a liability in respect of the disclaimed property, that has not been discharged by the disclaimer; or (c) where the disclaimed property is property in a dwelling house, any person who at the time when the bankruptcy order was made was in occupation of or entitled to occupy the dwelling house. (2) On an application under subsection (1), the Court may, on such terms as it considers fit, order that the disclaimed property be vested in or delivered to— (a) a person entitled to the property;

194 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (b) a person under a liability in respect of the property that has not been discharged by the disclaimer; (c) a trustee for a person referred to in paragraph (a) or (b); or (d) where the disclaimed property is property in a dwelling house, any person who at the time when the bankruptcy order was made was in occupation of or entitled to occupy the dwelling house. (3) The Court shall not make an order in respect of a person specified in subsection (2)(b), or in respect of a trustee of such a person, unless it appears to the Court that it would be fair to do so for the purpose of compensating the person subject to the liability in respect of the disclaimer. (4) The effect of any order under this section shall be taken into account in assessing the extent of the loss or damage suffered by a person for the purposes of section 361(3). (5) Subject to subsection (6), where a vesting order is made under this
section vesting property in a person, the property vests immediately without any
conveyance, transfer or assignment. (Amended by Act 11 of 2004) (6) Where another Virgin Islands enactment— (a) requires the transfer of property vested by an order under this
section to be registered; and
(b) that enactment enables the order to be registered, on the making of a vesting order, the property vests in equity but does not vest at law until the registration requirements of the enactment have been complied with. Vesting orders in respect of leases
363. (1) Where the Court makes an order under section 362 vesting property
of a leasehold nature in a person, the vesting order shall be made on terms that make that person subject— (a) to the same liabilities and obligations as the bankrupt was subject to under the lease on the date that the bankruptcy order was made; or (b) to the same liabilities and obligations as that person would have been subject to if the lease had been assigned to him or her on that date. (2) Where the property vested by an order under section 362 relates to only part of the property comprised in a lease, subsection (1) applies as if the lease comprised the property subject to the vesting order. (3) Where no person is willing to accept a vesting order made subject to subsection (1), the Court, by order— (a) may vest the property in any person who is liable, whether personally or in a representative capacity and whether alone or jointly with the bankrupt, to perform the lessee’s covenants in the lease; and

LAW OF VIRGIN ISLANDS Insolvency Act 195 Revision Date: 1 Jan 2020 (b) where a vesting order is made under paragraph (a), may vest the property free from all estates, encumbrances and interests created by the bankrupt. (4) Where a person declines to accept a vesting order made subject to subsection (1), he or she is excluded from all interest in the property. Land subject to rentcharge
364. Where land subject to a rentcharge is disclaimed and that land vests by
operation of law in any person, including the Crown, that person and his or her successors in title are not subject to any personal liability in respect of any sums becoming due under the rentcharge except sums becoming due after he or she, or some person claiming title under or through him or her, has taken possession or control of the land or has entered into occupation of it. Disclaimer presumed valid
365. Unless it is proved that a trustee has breached his or her duty to give
notice under section 358(3) or that he or she has otherwise breached his or her duties under this Act or the Rules with regard to disclaimer, a disclaimer of property by the trustee is presumed to be valid and effective. Investigation of Bankrupt’s Affairs Statement of assets and liabilities
366. (1) Where a bankruptcy order has been made against an individual
otherwise than on his or her own application, the bankrupt shall submit a verified statement of his or her assets and liabilities to his or her trustee within 21 days of the date of the bankruptcy order. (Amended by Act 11 of 2004) (2) A statement of assets and liabilities shall contain— (a) such particulars of the bankrupt’s creditors and of his or her debts and other liabilities and of his or her assets as may be prescribed; and (b) such other information as may be prescribed. (3) A trustee or the Court may, in accordance with the Rules— (a) release the bankrupt from his or her duty under subsection (1); or (b) extend the period of time specified in that subsection. (Amended by Act 11 of 2004) (3A) Where the trustee considers that it would prejudice the conduct of the bankruptcy for the whole or part of a statement of assets and liabilities submitted to him or her to be disclosed, he or she may apply to the Court for an order of limited disclosure in respect of the statement, or any specified part of it. (Inserted by Act 11 of 2004) (3B) The Court may, on an application under subsection (3A), order that the statement of assets and liabilities or, as the case may be, the specified part of it, is not filed in Court, or that it is filed separately and that it is not to be open to inspection otherwise than with the leave of the Court. (Inserted by Act 11 of 2004)

196 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (4) A bankrupt who— (a) fails to submit a statement of his or her assets and liabilities in accordance with subsection (1); or (b) submits a statement of his or her assets and liabilities that does not comply with the prescribed requirements, commits an offence. Preliminary report
367. (1) The trustee of a bankrupt shall, within 60 days of the date of the
bankruptcy order, prepare a preliminary report stating whether, in his or her opinion, further enquiry is desirable with respect to— (a) whether the bankrupt has committed a bankruptcy offence; (b) whether there are any claims under Part XIV; (c) any matter relating to the conduct by the bankrupt of his or her business or affairs. (2) The trustee shall send a copy of the report prepared under subsection (1) to the Official Receiver. (3) Subsection (2) does not apply to the Official Receiver when he or she is acting as trustee. (4) The Court may, on the application of the trustee, extend the period specified in subsection (1) on such terms and conditions as it considers fit. Duty of Official Receiver concerning report under section 367
368. Where the Official Receiver receives a report under section 367, he or she
shall carry out such investigation, if any, as he or she considers appropriate. (Amended by Act 11 of 2004) Application for examination of bankrupt and others
369. (1) Where a bankruptcy order is made, an application may be made to the
Court, ex parte, by the trustee or by the Official Receiver at any time before the discharge of the bankrupt for an order that a person specified in subsection (2) appears before the Court to be examined concerning the affairs, dealings and assets of the bankrupt. (2) An application under subsection (1) may be made in respect of one or more of the following— (a) the bankrupt; (b) the bankrupt’s spouse or former spouse; (c) any person known or believed to be indebted to the bankrupt or to have in his or her possession any asset comprised in the bankrupt's estate; and (d) any person appearing to the Court to be able to give information concerning the bankrupt or the bankrupt's dealings, affairs, assets or liabilities.

LAW OF VIRGIN ISLANDS Insolvency Act 197 Revision Date: 1 Jan 2020 (3) The examination of a bankrupt may be held in public or in private but the examination of any other person shall be held in private. (4) Unless the Court otherwise orders, the trustee shall make an application under subsection (1) in respect of the bankrupt if notice requiring him or her to do so is given to him or her , in accordance with the Rules, by not less than 50%, in value, of the creditors of the bankrupt. Order for examination
370. (1) In this section, “examinee” means the person to be examined before
the Court.
(2) On hearing an application made under subsection 369, the Court may order the examinee to appear before the Court to be examined. (3) An order under subsection (2)— (a) shall direct the examinee to appear before the Court to be examined at a venue specified in the order; (b) where the examinee is the bankrupt, shall state whether the examination is to be a public or a private examination; (c) may require the person concerned to produce at the examination any books, records or other documents in his or her possession or control that relate to the bankrupt or his or her dealings, affairs, liabilities or assets; (d) may provide for an alternative method of service of the order on the examinee; (e) shall state the action that may be taken against a person if he or she does not appear before the Court as required by the order; and (f) where the examination is to be a public examination, may require the examination to be advertised, specifying the method of such advertisement. (4) Where the Court makes an order under subsection (2), the applicant shall, forthwith serve a sealed copy of the order on the examinee and, where the trustee is not the Official Receiver— (a) if the applicant is the trustee, send a sealed copy of the order to the Official Receiver; or (b) if the applicant is the Official Receiver, send a sealed copy of the order to the trustee. (Amended by Act 11 of 2004) (5) Where an order under subsection (2) is for the public examination of the bankrupt, the applicant shall give not less than 14 days notice of the examination to each creditor of the bankrupt. (6) The Court may as part of an order made under this section, or at any subsequent time, make one or more of the following directions— (a) a direction specifying the matters upon which the examinee may be examined;

198 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (b) a direction specifying the procedures to be followed at the examination; and (c) in the case of an examinee referred to in section 369(2)(b), (c) or (d) a direction that the examinee— (i) file with the Court an affidavit containing such matters as are specified by the Court, or (ii) produce at his or her examination any documents in his or her possession or under his or her control relating to the bankrupt's dealings, affairs, assets or liabilities. Conduct of examination
371. (1) This section applies to an examination held pursuant to an order made
under section 370.
(2) An examinee shall be examined on oath, either orally or by interrogatories, and he or she shall answer such questions as the Court may put, or allow to be put to him or her. (3) Subject to subsections (4) and (5), an examination is conducted by the applicant, or by his or her legal practitioner, and the person examined is entitled to be represented by a legal practitioner who may put such questions to the examinee as the Court may allow for the purpose of explaining or qualifying answers given by him or her. (4) The examinee may also be examined— (a) if the applicant is the Official Receiver, by the trustee; or (b) if the applicant is the trustee, by the Official Receiver. (5) At a public examination of the bankrupt, questions may, with the leave of the Court, be put to the examinee by any creditor present at the examination or by the legal practitioner representing such a creditor. (6) An examination shall be recorded in writing and the examinee shall sign the record. (7) Subject to section 372, the written record of an examination is admissible in evidence in any proceedings under this Act. Examinee shall answer questions put to him or her
372. (1) An examinee is not excused from answering a question put to him or
her at an examination held pursuant to an order made under section 370 on the ground that the answer may incriminate him or her or tend to incriminate him or her. (2) Notwithstanding subsection (1), the record of an examination held pursuant to an order made under section 370 is not admissible as evidence in any criminal proceedings against the examinee except where he or she is charged with the offence of perjury.

LAW OF VIRGIN ISLANDS Insolvency Act 199 Revision Date: 1 Jan 2020 Examinee failing to appear for his or her examination
373. (1) Where a person without reasonable excuse fails to attend an
examination ordered to be held under section 370, or there are reasonable grounds for believing that the examinee has absconded, or is about to abscond, with a view to avoiding or delaying his or her examination, the Court may issue a warrant to a police officer or a prescribed officer of the Court— (a) for the arrest of that person; and (b) for the seizure of any books, papers, records, money or goods in that person’s possession. (2) The Court may authorise a person arrested under a warrant issued under subsection (1) to be kept in custody, and anything seized under such a warrant to be held, in accordance with the Rules, until that person is brought before the Court under the warrant or until such other time as the Court may order. (3) A person who fails to attend an examination ordered to be held under
section 370 commits an offence.
Court’s enforcement powers
374. (1) If it appears to the Court, on consideration of any evidence obtained
under section 371, 373 or this section, that any person has in his or her possession any assets comprised in the bankrupt's estate, the Court may, on the application of the trustee, order that person to deliver the assets or any of them to the trustee at such time, in such manner and on such terms as the Court considers fit. (2) If it appears to the Court, on consideration of any evidence obtained under section 371, 373 or this section, that any person is indebted to the bankrupt, the Court may, on the application of the trustee, order that person to pay the trustee, at such time and in such manner as the Court may direct, the whole or part of the amount due, whether in full discharge of the debt or otherwise as the Court thinks fit. (Amended by Act 11 of 2004) (3) The Court may order that any person who, if within the jurisdiction of the Court, would be liable to be examined pursuant to an order made under
section 370 shall be examined in the Virgin Islands or any place outside the
Virgin Islands.
Discharge and Annulment of Bankruptcy
Bankrupt ineligible for automatic discharge
375. (1) For the purposes of section 376, a bankrupt is ineligible for automatic
discharge if—
(a) he or she has been an undischarged bankrupt at any time in the 10 years prior to the date of the bankruptcy order; or (b) he or she has been convicted of a bankruptcy offence. (2) Where a previous bankruptcy order made against a person has been annulled under section 382, the period during which that person was an

200 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS undischarged bankrupt by virtue of that bankruptcy order shall be ignored for the purposes of subsection (1)(a). Automatic discharge
376. (1) Subject to subsection (2), a bankrupt is discharged from bankruptcy at
the end of the period of 3 years commencing on the date of the bankruptcy order unless— (a) he or she is ineligible for automatic discharge by virtue of section 375; or (b) he or she has previously been discharged under section 379(1)(b) or (c). (2) On the application of a person specified in subsection (3), the Court may, on the grounds specified in subsection (4)— (a) extend the period referred to in subsection (1); (b) order that the period will cease to run until the fulfilment of such conditions as it may specify; or (c) order that the bankrupt is not entitled to automatic discharge. (3) An application under subsection (2) may be made on the application of the Official Receiver or the trustee of the bankrupt. (4) The Court may— (a) make an order under subsection (2)(a) or (b) if it is satisfied that the bankrupt has failed or is failing to comply with any of his or her obligations under this Act or the Rules; or (b) make an order under subsection (2)(c) on any of the grounds upon which it could refuse to discharge the bankrupt under section 379. (5) An application under subsection (2)— (a) shall be made before the bankrupt has been discharged under subsection (1); and (b) when made, operates to suspend the period referred to in subsection (1) until after the determination of the application by the Court. (6) The Court may not, by an order made under section 496(1), permit an application to be made under subsection (2) after the discharge of a bankrupt under subsection (1). Application by bankrupt concerning order for suspension of discharge
377. (1) Where the Court has made an order under section 376(2)(b) that the
period for automatic discharge will cease to run, the bankrupt may apply to the Court for the order to be varied or discharged. (2) On an application made under subsection (1), the Court may vary or discharge its order.

LAW OF VIRGIN ISLANDS Insolvency Act 201 Revision Date: 1 Jan 2020 Application for discharge by Court order
378. (1) A bankrupt may apply to the Court for his or her discharge—
(a) where he or she is ineligible for automatic discharge or where the Court has made an order under section 376(2)(c) that he or she is not entitled to automatic discharge, at any time after 3 years from the date of the bankruptcy order; or (b) in any other case, at any time after 6 months from the date of the bankruptcy order. (2) An application under subsection (1) shall be served on— (a) the Official Receiver; and (b) his or her trustee, if not the Official Receiver, not less than 42 days before the date fixed for the hearing. Court order on application for discharge
379. (1) Subject to subsection (3), on an application under section 378, the
Court may—
(a) refuse the application;
(b) make an order discharging the bankrupt absolutely; or (c) make an order discharging the bankrupt subject to such conditions as it considers fit, including conditions with respect to— (i) any income which may subsequently become due to him or her; or (ii) any assets that may devolve on him or her or be acquired by him or her after his or her discharge. (Amended by Act 11 of 2004) (2) An order under subsection (1)(c) may be made with immediate effect or may be made effective after such period or until the fulfilment of such conditions as may be specified in the order. (3) Where an application is made under section 378 more than 8 years after the date of the bankruptcy order, the Court shall not refuse the application unless it is satisfied that there are exceptional reasons for not granting the bankrupt his or her discharge. (Amended by Act 11 of 2004) (4) Subject to subsection (3), the Court may refuse to grant a bankrupt his or her discharge if— (a) the bankrupt has failed or is failing to comply with his or her obligations under this Act or the Rules; (b) the bankrupt has, after the date of the bankruptcy order, engaged in a prohibited activity within the meaning of section 260(3); (c) the bankrupt has been convicted of a bankruptcy offence; (d) the bankrupt has failed, whether intentionally or not, to disclose to his or her trustee particulars of— (i) any of his or her assets;

202 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (ii) any liability existing at the date of the bankruptcy order; or (iii) any income or expected income; (e) where the bankrupt has been engaged in any business for any of the period of 3 years prior to the date of the bankruptcy order, or she has— (i) failed to keep such books and accounts as would sufficiently disclose his or her business transactions and financial position whilst engaged in his or her business; or (ii) having kept the books and accounts referred to in subparagraph (i), he or she has failed to preserve them; (f) the bankrupt continued to trade after knowing, or having reason to believe himself or herself to be unable to pay his or her debts as they fell due; (g) the bankrupt contracted any liability that is claimable in his or her bankruptcy without having at the time of contracting it any reasonable expectation that he or she would be able to discharge it; (h) that the bankrupt, either before or after the bankruptcy order, has committed any fraud or breach of trust; (i) that the bankrupt has entered into a voidable transaction within the meaning of section 400; or (j) for any other reason it considers it appropriate to do so. (Amended by Act 11 of 2004) Effect of discharge
380. (1) Subject to this section, where a bankrupt is discharged, the discharge
releases him or her from all debts claimable in the bankruptcy, but has no effect— (a) on the functions, so far as they remain to be carried out, of the trustee; or (b) on the operation, for the purposes of the carrying out of those functions, of the provisions of this Act. (2) The discharge of a bankrupt does not affect the right— (a) of any creditor of the bankrupt to claim in the bankruptcy for any debt from which the bankrupt is released; or (Amended by Act 11 of 2004) (b) of any secured creditor of the bankrupt to enforce his or her security interest for the payment of a debt from which the bankrupt is released. (3) The discharge of a bankrupt does not release the bankrupt from— (a) a liability incurred by means of a fraud or fraudulent breach of trust to which the bankrupt was a party or a liability of which he or she has obtained forbearance by fraud;

LAW OF VIRGIN ISLANDS Insolvency Act 203 Revision Date: 1 Jan 2020 (b) a liability under a recognizance; or (c) a liability in respect of a fine imposed for an offence. (4) Except to such extent and subject to such conditions as the Court may otherwise order, the discharge of a bankrupt does not release the bankrupt from— (a) a liability under a maintenance agreement or maintenance order or arrears payable under such an agreement or order; (b) a liability to pay damages for negligence, nuisance or breach of a statutory, contractual or other duty, being damages in respect of personal injuries to any person; or (c) such other liabilities, not being liabilities that may be claimed in the bankruptcy, as may be prescribed. (5) The discharge of a bankrupt does not release any person other than the bankrupt from any liability, whether as partner or co-trustee of the bankrupt or otherwise, from which the bankrupt is released by the discharge, or from any liability as surety for the bankrupt or as a person in the nature of such a surety. (6) In subsection (4), “personal injuries” includes death and any disease or other impairment of a person’s physical or mental condition. Discharged bankrupt to give assistance
381. (1) A discharged bankrupt shall, even though discharged, give such
assistance as his or her trustee reasonably requires in the realisation and distribution of such of his or her assets as are vested in his or her trustee. (2) A discharged bankrupt who contravenes subsection (1) commits an offence. Annulment of bankruptcy order
382. (1) The Court may annul a bankruptcy order if at any time it appears to
the court—
(a) that, on any grounds existing at the time the order was made, the order ought not to have been made; or (b) that, to the extent required by this Act and the Rules, the claims made in the bankruptcy and the expenses of the bankruptcy have all, since the making of the order, been either paid or secured for to the satisfaction of the Court. (2) The Court may annul a bankruptcy order whether or not the bankrupt has been discharged. (3) Where the court annuls a bankruptcy order— (a) any sale or other disposition of assets, payment made or other thing done, under any provision in this Part, by or under the authority of the trustee or by the Court is valid; but (b) if any of the bankrupt’s estate is then vested, under any such provision, in such a trustee, it shall vest in such person as the

204 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS Court may appoint or, in default of any such appointment, revert to the bankrupt on such terms, if any, as the court may direct. (4) The Court may, in an order made under subsection (2), include such supplemental provisions as may be authorised by the Rules. (5) The trustee shall vacate office if the bankruptcy order is annulled. Release of trustee
383. (1) Where the Official Receiver ceases to be the trustee of a bankrupt’s
estate and another person is appointed trustee in his or her place, the Official Receiver obtains his or her release— (a) from the appointment of the new trustee; or (b) such later date as the Court may determine. (2) If the Official Receiver, while he or she is the trustee, gives notice to the Court that the administration of the bankrupt’s estate in accordance with this
Part is for practical purposes complete, he or she obtains his or her release with
effect from such time as the Court may determine.
(3) A person other than the Official Receiver who ceases to be trustee may apply to the Court for his or her release and the Court may grant the release unconditionally or subject to such conditions as it considers fit, or withhold it. (4) If the Court withholds the release it may make an order against the former trustee under section 384. (5) Where a bankruptcy order is annulled, the trustee at the time of the annulment has his or her release with effect from such time as the Court may determine. (6) Subject to subsection (7), where a former trustee is released under this
section, he or she is discharged from all liability in respect of any act or default
of his or hers in relation to the administration of the estate and otherwise in relation to his or her conduct as trustee. (7) Subsection (6) does not prevent the Court from making an order under
section 384 against a trustee who has been released under this section.
(8) A trustee, other than the Official Receiver, who obtains his or her release under this section shall file a notice in the prescribed form with the Official Receiver. Liability of trustee
384. (1) Where on an application under this section the Court is satisfied—
(a) that the trustee of a bankrupt’s estate has misapplied or retained, or become accountable for, any money or other assets comprised in the bankrupt’s estate; or (b) that a bankrupt’s estate has suffered any loss in consequence of any misfeasance or breach of fiduciary or other duty by a trustee of the estate in the carrying out of his or her functions, the Court may order the trustee, for the benefit of the estate, to repay, restore or account for money or other assets, together with interest at such rate as the Court considers just, or, as the case may

LAW OF VIRGIN ISLANDS Insolvency Act 205 Revision Date: 1 Jan 2020 require, to pay such sum by way of compensation in respect of the misfeasance or breach of fiduciary or other duty as the Court considers just. (2) Subject to subsection (3), an application under this section may be made by the Official Receiver, a creditor of the bankrupt or, whether or not there is, or is likely to be, a surplus for the purposes of section 348, the bankrupt himself or herself. (3) The leave of the Court is required for the making of an application under this section if it is to be made by the bankrupt or if it is to be made after the trustee has had his or her release under section 383. (4) Where— (a) the trustee seizes or disposes of any asset which is not comprised in the bankrupt’s estate; and (b) at the time of the seizure or disposal the trustee believes, and has reasonable grounds for believing, that he or she is entitled, whether pursuant to an order of the court or otherwise, to seize or dispose of that asset, the trustee is not liable to any person, whether under this section or otherwise, in respect of any loss or damage resulting from the seizure or disposal except in so far as that loss or damage is caused by negligence of the trustee and the trustee has a lien on the asset, or the proceeds of its sale, for such of the expenses of the bankruptcy as were incurred in connection with the seizure or disposal. (5) Subsection (1) does not prevent any person from instituting any other proceedings in relation to matters in respect of which an application can be made under that subsection. Second or Subsequent Bankruptcy Stay of distribution in case of second bankruptcy
385. (1) This section and section 386 apply where a bankruptcy order is made
against an undischarged bankrupt and in both sections— “earlier bankruptcy” means the bankruptcy, or the most recent bankruptcy, from which the bankrupt has not been discharged at the time when the later bankruptcy commences; “later bankruptcy” means the bankruptcy arising from the bankruptcy order made against an undischarged bankrupt; and “existing trustee” means the trustee, if any, of the bankrupt’s estate for the purposes of the earlier bankruptcy. (2) Where the existing trustee has been given notice of the application for the later bankruptcy, any distribution or other disposition by him or her of any asset to which subsection (3) applies made after the giving of the notice is void except to the extent that it was made with the consent of the Court or is or was subsequently ratified by the Court. (3) Subsection (2) applies to—

206 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (a) any asset which is vested in the existing trustee under section 318; (b) any money paid to the existing trustee pursuant to an income payments order under section 322; and (c) any asset or money which is, or in the hands of the existing trustee represents, the proceeds of sale or application of an asset or money falling within paragraphs (a) or (b). Adjustment between earlier and later bankruptcy estates
386. (1) With effect from the commencement of the later bankruptcy any asset
to which section 385(3) applies which, immediately before the commencement of that bankruptcy, is comprised in the bankrupt's estate for the purposes of the earlier bankruptcy is to be treated as comprised in the bankrupt's estate for the purposes of the later bankruptcy. (2) Any sum which in pursuance of an income payments order made under section 322 is payable after the commencement of the later bankruptcy to the existing trustee shall form part of the bankrupt's estate for the purposes of the later bankruptcy and the court may give such consequential directions for the modification of the order as it considers fit. (3) Anything comprised in a bankrupt's estate by virtue of subsections (1) or (2) is so comprised subject to a first charge in favour of the existing trustee for his or her remuneration or any bankruptcy expenses incurred by him or her in relation thereto. (4) Except as provided in this section and in section 385, any asset which is, or by virtue of section 319 is capable of being, comprised in the bankrupt's estate for the purposes of the earlier bankruptcy, or of any bankruptcy prior to it, is not comprised in his or her estate for the purposes of the later bankruptcy. (5) The creditors of the bankrupt in the earlier bankruptcy and the creditors of the bankrupt in any bankruptcy prior to the earlier bankruptcy, are not to be creditors of his or hers in the later bankruptcy in respect of the same liabilities but the existing trustee may claim in the later bankruptcy for— (a) the unsatisfied balance of the liabilities, including any liability under this subsection, claimable against the bankrupt’s estate in the earlier bankruptcy; (b) any interest payable on that balance; and (c) any unpaid expenses of the earlier bankruptcy. (6) Any amount claimable under subsection (5) ranks in priority after all the other claims admitted in the later bankruptcy and after interest on those claims and, accordingly, shall not be paid unless those claims and that interest have first been paid in full.

LAW OF VIRGIN ISLANDS Insolvency Act 207 Revision Date: 1 Jan 2020
PART XIII
BANKRUPTCY OFFENCES
Definitions
387. In this Part—
(a) references to assets comprised in the bankrupt’s estate or to assets possession of which is required to be delivered up to the trustee include any assets specified in section 313; (b) “initial period” means the period between the filing of the application for the bankruptcy order and the commencement of the bankruptcy; and (c) a reference to a number of months or years before the application is to that period ending with the filing of the application for the bankruptcy order. Defence of innocent intention
388. (1) Subject to subsection (2), the bankrupt does not commit a bankruptcy
offence if he or she proves that, at the time of the conduct constituting the offence, he or she had no intent to defraud or to conceal the state of his or her affairs. (2) Subsection (1) does not apply to sections 390(1)(e), 392(b), 392(c), 392(d), 392(e), 396(1), 397 and 398. Non-disclosure
389. (1) The bankrupt commits an offence if—
(a) he or she does not to the best of his or her knowledge and belief disclose all the assets comprised in his or her estate to the trustee; or (b) he or she does not inform the trustee of any disposal of any assets which, but for the disposal, would be so comprised, stating how, when, to whom and for what consideration the asset was disposed of. (2) Subsection (1)(b) does not apply to any disposal in the ordinary course of a business carried on by the bankrupt or to any payment of the ordinary expenses of the bankrupt or his or her family. Concealment of assets
390. The bankrupt commits an offence if—
(a) he or she does not deliver up possession to the trustee, or as the trustee may direct, those assets comprised in his or her estate as are in his or her possession or under his or her control of which he or she is required by law so to deliver up; (b) he or she conceals any debt due to or from him or her or conceals any asset, the value of which is not less than the prescribed

208 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS amount and possession of which he or she is required to deliver up to the trustee; (c) in the 12 months before the application, or in the initial period, he or she did anything which would have been an offence under paragraph (b) if the bankruptcy order had been made immediately before he or she did it; (d) or she removes, or in the initial period removed, any asset the value of which was not less than the prescribed amount and possession of which he or she is or would have been required to deliver up to the trustee; or (e) he or she without reasonable excuse fails, on being required to do so by the Official Receiver or the Court— (i) to account for the loss of any substantial part of his or her assets incurred in the 12 months before the application or in the initial period; or (ii) to give a satisfactory explanation of the manner in which such a loss was incurred. Concealment of books and papers; falsification
391. The bankrupt commits an offence if—
(a) he or she does not deliver up possession to the trustee, or as the trustee may direct, of all documents in his or her possession or control which relate to his or her estate or his or her affairs; (b) he or she prevents, or in the initial period prevented, the production of any documents relating to his or her estate or affairs; (c) he or she conceals, destroys, mutilates or falsifies, or causes or permits the concealment, destruction, mutilation or falsification of, any documents relating to his or her estate or affairs; (d) he or she makes, or causes or permits the making of, any false entries in any documents relating to his or her estate or affairs; (e) he or she disposes of, or alters or makes any omission in or causes or permits the disposal, altering or making of any omission in, any document relating to his or her estate or affairs; or (f) in the 12 months before the application, or in the initial period, he or she did anything which would have been an offence under paragraph (c), (d) or (e) if the bankruptcy order had been made before he or she did it. False statements
392. The bankrupt commits an offence if—
(a) he or she makes any false statement or any material omission in any statement made under this Act relating to his or her affairs;

LAW OF VIRGIN ISLANDS Insolvency Act 209 Revision Date: 1 Jan 2020 (b) knowing or believing that a false claim has been made by any person under the bankruptcy, he or she fails to inform the trustee as soon as practicable; (c) he or she attempts to account for any part of his or her assets by fictitious losses or expenses; (d) at any meeting of his or her creditors in the 12 months before the application or, whether or not at such a meeting, at any time in the initial period, he or she did anything which would have been an offence under paragraph (c) if the bankruptcy order had been made before he or she did it; or (e) he or she is, or at any time has been, guilty of any false representation or other fraud for the purposes of obtaining the consent of his or her creditors, or any of them, to an agreement with reference to his or her affairs or to his or her bankruptcy. Fraudulent disposal of assets
393. (1) The bankrupt commits an offence if—
(a) he or she makes or causes to be made, or has during the period of 5 years prior to the date of the bankruptcy order made or caused to be made, any gift or transfer of, or any charge on, his or her assets; or (b) he or she conceals or removes, or has at any time before the commencement of the bankruptcy, concealed or removed, any of his or her assets after, or within 60 days before, the date on which a judgement or order for the payment of money has been obtained against him or her, being a judgement or order which was not satisfied before the commencement of the bankruptcy. (2) The reference in subsection (1) to making a transfer of or a charge on any asset includes causing or conniving at the levying of any execution against that asset. Absconding
394. The bankrupt commits an offence if—
(a) he or she leaves, or attempts or makes preparations to leave the Virgin Islands with any assets the value of which is not less than the prescribed amount and possession of which he or she is required to deliver up to the Official Receiver or the trustee; or (b) in the 6 months before the application, or in the initial period, he or she did anything which would have been an offence under paragraph (a) if the bankruptcy order had been made immediately before he or she did it. Fraudulent dealing with asset obtained on credit
395. (1) The bankrupt commits an offence if, in the 12 months before the
application, or in the initial period, he or she disposed of any asset which he or

210 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS she had obtained on credit and, at the time he or she disposed of it, had not paid for. (2) A person commits an offence if, in the 12 months before the application, or in the initial period, he or she acquired or received an asset from the bankrupt knowing or believing— (a) that the bankrupt owed money in respect of the asset; and (b) that the bankrupt did not intend, or was unlikely to be able, to pay the money so owed. (3) A person does not commit an offence under subsection (1) or (2) if the disposal, acquisition or receipt of the asset was in the ordinary course of a business carried on by the bankrupt at the time of the disposal, acquisition or receipt. (4) In determining for the purposes of this section whether any asset is disposed of, acquired or received in the ordinary course of a business carried on by the bankrupt, regard may be had, in particular, to the price paid for the asset. (5) In this section, references to disposing of an asset include pawning or pledging it and references to acquiring or receiving an asset shall be read accordingly. Obtaining credit: engaging in business
396. (1) The bankrupt commits an offence if—
(a) either alone or jointly with any other person, he or she obtains credit to the extent of the prescribed amount or more without informing the person from whom he or she obtains credit that he or she is an undischarged bankrupt; (Amended by Act 11 of 2004) (b) he or she engages, whether directly or indirectly, in any business under a name other than that in which he or she was made bankrupt without disclosing to all persons with whom he or she enters into any business transaction the name under which he or she was made bankrupt. (2) The reference to the bankrupt obtaining credit includes the following cases— (a) where goods are billed to him or her under a hire-purchase agreement, or agreed to be sold to him or her under a conditional sale agreement; and (b) where he or she is paid in advance, whether in money or otherwise, for the supply of goods and services. Failure to keep proper accounts of business
397. (1) Where the bankrupt has been engaged in any business for any of the
period of 2 years before the application, he or she commits an offence if he or she— (a) has not kept proper accounting records throughout that period and throughout any part of the initial period in which he or she was so engaged; or

LAW OF VIRGIN ISLANDS Insolvency Act 211 Revision Date: 1 Jan 2020 (b) has not preserved all the accounting records which he or she has kept. (2) The bankrupt does not commit an offence under subsection (1)— (a) if his or her unsecured liabilities at the commencement of the bankruptcy did not exceed the prescribed amount; or (b) if he or she proves that in the circumstances in which he or she carried on business the omission was honest and excusable. (3) For the purpose of this section, a person is deemed not to have kept proper accounting records if he or she has not kept such records as are necessary to show or explain his or her transactions and financial position in his or her business, including— (a) records containing entries from day to day, in sufficient detail, of all cash paid and received; (b) where the business involves dealing in goods, statements of annual stock-takings; and (c) except in the case of goods sold by way of retail trade to the actual customer, records of all goods sold and purchased showing the buyers and sellers in sufficient detail to enable the goods and the buyers and sellers to be identified. Gambling
398. (1) The bankrupt commits an offence if he or she has—
(a) in the 2 years before the application, materially contributed to, or increased the extent of, his or her insolvency by gambling or by rash and hazardous speculations; or (b) in the initial period, lost any of his or her assets by gambling or by rash and hazardous speculations. (2) In determining for the purposes of this section whether any speculations were rash and hazardous, the financial position of the bankrupt at the time when he or she entered into them shall be taken into consideration. Supplementary provisions
399. (1) Proceedings for a bankruptcy offence may not be instituted after the
annulment of the bankruptcy.
(2) Without limiting the liability of a bankrupt in respect of a subsequent bankruptcy, the bankrupt does not commit an offence under this Part in respect of anything done after his or her discharge but nothing in this Act prevents the institution of proceedings against a discharged bankrupt for an offence committed before his or her discharge. (3) It is not a defence in proceedings for an offence under this Part that anything relied on, in whole or in part, as constituting that offence was done outside the Virgin Islands.

212 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS
PART XIV
VOIDABLE TRANSACTIONS
Interpretation for this Part
400. (1) In this Part—
“debtor” means the individual against whom a bankruptcy order is made; “insolvent bankruptcy” means a bankruptcy where the assets comprised in the bankrupt’s estate are insufficient to pay his or her liabilities and the expenses of the bankruptcy; “insolvency transaction” has the meaning specified in subsection (2); “onset of insolvency” means the date on which the application for a bankruptcy order was filed; “voidable transaction” means— (a) an unfair preference; (b) an undervalue transaction; (c) a voidable general assignment of book debts; or (d) an extortionate credit transaction; “vulnerability period” means— (a) for the purposes of sections 401, 402 and 403— (i) in the case of a transaction entered into with, or a preference given to, a connected person, the period commencing 2 years prior to the onset of insolvency and ending on the date of the bankruptcy order; and (ii) in the case of a transaction entered into with, or a preference given to, any other person, the period commencing 6 months prior to the onset of insolvency and ending on the date of the bankruptcy order; and (b) for the purposes of section 404, the period commencing 5 years prior to the onset of insolvency and ending on the date of the bankruptcy order; (2) A transaction is an insolvency transaction if— (a) it is entered into at a time when the debtor is insolvent; or (b) it causes the debtor to become insolvent. (3) For the purposes of subsection (2), an individual is insolvent if he or she is unable to pay his or her debts as they fall due for payment. (Amended by Act 11 of 2004) (4) This Part applies in respect of an individual only if a bankruptcy order is made against him or her.

LAW OF VIRGIN ISLANDS Insolvency Act 213 Revision Date: 1 Jan 2020 Unfair preferences
401. (1) Subject to subsection (2), a transaction entered into by an individual is
an unfair preference given by the individual to a creditor if the transaction— (a) is an insolvency transaction; (b) is entered into within the vulnerability period; and (c) has the effect of putting the creditor into a position which, in the event of the individual becoming a bankrupt, will be better than the position he or she would have been in if the transaction had not been entered into. (2) A transaction is not an unfair preference if the transaction took place in the ordinary course of business. (3) A transaction may be an unfair preference notwithstanding that it is entered into pursuant to the order of a Court or tribunal in or outside the Virgin Islands. (4) Where a transaction entered into by an individual within the vulnerability period has the effect specified in subsection (1)(c) in respect of a creditor who is a connected person, unless the contrary is proved, it is presumed that the transaction was an insolvency transaction and that it did not take place in the ordinary course of business. Undervalue transactions
402. (1) Subject to subsection (2), an individual enters into an undervalue
transaction with a person if—
(a) he or she makes a gift to that person or otherwise enters into a transaction with that person on terms that provide for him or her to receive no consideration; or (b) he or she enters into a transaction with that person for a consideration the value of which, in money or money’s worth, is significantly less than the value, in money or money’s worth, of the consideration provided by him or her; and (c) in either case, the transaction concerned— (i) is an insolvency transaction; and (ii) is entered into within the vulnerability period. (2) An individual does not enter into an undervalue transaction with a person if— (a) the individual enters into the transaction in good faith and for the purposes of his or her business; and (b) at the time when he or she enters into the transaction, there were reasonable grounds for believing that the transaction would benefit him or her. (3) A transaction may be an undervalue transaction notwithstanding that it is entered into pursuant to the order of a court or tribunal in or outside the Virgin Islands.

214 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (4) Where an individual enters into a transaction with a connected person within the vulnerability period and the transaction falls within subsection (1)(a) or subsection (1)(b), unless the contrary is proved, it is presumed that— (a) the transaction was an insolvency transaction; and (b) subsection (2) did not apply to the transaction. Voidable general assignment of book debts
403. (1) This section applies where an individual engaged in any business
makes a general assignment to another of his or her existing or future book debts, or any class of them, and a bankruptcy order is subsequently made against him or her. (2) The assignment is voidable as regards book debts which were not paid before the filing of the application for the bankruptcy order, unless the assignment has been registered under the Bills of Sale Act. (3) For the purposes of subsections (1) and (2)— (a) “assignment” includes an assignment by way of security or charge on book debts; and (b) “general assignment” does not include— (i) an assignment of book debts due at the date of the assignment from specified debtors or of debts becoming due under specified contracts; or (ii) an assignment of book debts included either in a transfer of a business made in good faith and for value or in an assignment of assets for the benefit of creditors generally. (4) For the purposes of registration under the Bills of Sale Act, an assignment of book debts is to be treated as if it were a bill of sale given otherwise by way of security for the payment of a sum of money; and the provisions of that Act with respect to the registration of bills of sale apply accordingly with such necessary modifications as may be made by rules under that Act. Extortionate credit transactions
404. A transaction entered into by an individual within the vulnerability period
for, or involving the provision of, credit to him or her is an extortionate credit transaction if, having regard to the risk accepted by the person providing the credit— (a) the terms of the transaction are or were such as to require grossly exorbitant payments to be made (whether unconditionally or in certain contingencies) in respect of the provision of credit; or (b) the transaction otherwise grossly contravenes ordinary principles of fair trading.

LAW OF VIRGIN ISLANDS Insolvency Act 215 Revision Date: 1 Jan 2020 Orders in respect of voidable transactions
405. (1) Subject to section 406, where it is satisfied that a transaction entered
into by an individual is a voidable transaction the Court, on the application of the bankruptcy trustee of the individual— (a) may make an order setting aside the transaction in whole or in
part;
(b) in respect of an unfair preference or an undervalue transaction, may make such order as it considers fit for restoring the position to what it would have been if the bankrupt had not entered into that transaction; and (c) in respect of an extortionate credit transaction, may by order provide for any one or more of the following— (i) the variation of the terms of the transaction or the terms on which any security interest for the purposes of the transaction is held; (ii) the payment by any person who is or was a party to the transaction to the trustee of any sums paid by the bankrupt to that person by virtue of the transaction; (iii) the surrender by any person to the trustee of any asset held by him or her as security for the purposes of the transaction; and (iv) the taking of accounts between any persons. (2) Without prejudice to the generality of subsection (1)(b), an order under that paragraph may— (a) require any asset transferred as part of the transaction to be vested in the trustee; (b) require any asset to be vested in the trustee if it represents in any person’s hands the application either of the proceeds of sale of an asset transferred or of money transferred, in either case as part of the transaction; (c) release or discharge, in whole or in part, any security interest given by the bankrupt or the liability of the bankrupt under any contract; (d) require any person to pay, in respect of benefits received by him or her from the bankrupt, such sums to the trustee as the Court may direct; (e) provide for any surety or guarantor whose obligations to any person were released or discharged, in whole or in part, under the transaction, to be under such new or revived obligations to that person as the Court considers appropriate; (f) provide for security to be provided for the discharge of any obligation imposed by or arising under the order, for such an obligation to be charged on any asset and for the security interest or charge to have the same priority as a security interest or charge released or discharged, in whole or in part, under the transaction;

216 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (g) provide for a person affected by an order made under subsection (1) to claim in the bankruptcy of the bankrupt in such amount as the Court considers fit; and (Amended by Act 11 of 2004) (h) require the bankrupt or trustee to make a payment or transfer an asset to any person affected by an order made under subsection (1). (Amended by Act 11 of 2004) (3) Subject to section 406, in respect of an unfair preference or an undervalue transaction, an order under subsection (1) may affect the assets of, or impose any obligation on, any person whether or not he or she is the person with whom the bankrupt entered into the transaction. (Amended by Act 11 of 2004) Limitations on orders under section 405
406. (1) This section applies to an order made under section 405(1) in respect
of an unfair preference or an undervalue transaction.
(2) An order to which subsection (1) applies shall not— (a) prejudice any interest in an asset that was acquired in good faith and for value from a person other than the bankrupt, or prejudice any interest deriving from such an interest; or (b) require a person who received a benefit from the transaction in good faith and for value to pay a sum to the trustee, except where that person was a party to the transaction or, in respect of an unfair preference, the preference was given to that person when he or she was a creditor of the bankrupt. (3) For the purposes of subsection (2), where a person would, apart from the requirement for good faith, fall within the circumstances specified in paragraph (a) or (b), it is presumed, unless the contrary is proved, that he or she acquired the interest or received the benefit in good faith. (4) Subsection (3) does not apply to a person— (a) who, at the time of the transaction, had notice of— (i) the fact that the transaction was an unfair preference or an undervalue transaction, as the case may be; or (ii) the relevant proceedings as defined in subsection (5); or (b) who was, at the time of the transaction, a connected person. (5) For the purposes of subsection (4), a person has notice of the relevant proceedings if he or she had notice of the application on which the bankruptcy order was made. (Amended by Act 11 of 2004) Recoveries
407. Any money paid to, asset recovered or other benefit received by the
trustee as a result of an order made under section 405 is deemed to be an asset comprised in the bankrupt’s estate that is available to pay his or her unsecured creditors.

LAW OF VIRGIN ISLANDS Insolvency Act 217 Revision Date: 1 Jan 2020 Remedies not exclusive
408. The provisions of this Part apply without prejudice to the availability of
any other remedy.
PART XV
BANKRUPTCY RESTRICTIONS ORDERS AND UNDERTAKINGS Interpretation for this Part
409. In this Part—
“restricted person” means a person—
(a) against whom a bankruptcy restrictions order or an interim order has effect; or (b) in respect of whom a bankruptcy restrictions undertaking is in place; “voluntary liquidator” means— (a) a liquidator appointed by the directors or members of an international business company under Part XII of the BVI Business Companies Act; or (b) a voluntary liquidator within the meaning specified in section 2 of the BVI Business Companies Act. (Substituted by Act 16 of 2004) Bankruptcy restrictions orders and undertakings
410. (1) A bankruptcy restrictions order is an order that an individual shall not,
for the period specified in the order, engage in a prohibited activity without the leave of the Court. (2) A bankruptcy restrictions undertaking is an undertaking in writing given by an individual to the Official Receiver that he or she will not, for the period specified in the undertaking, engage in a prohibited activity without the leave of the Court. (3) For the purpose of this Part, an individual engages in a prohibited activity if— (a) he or she is a director of a company; (b) he or she acts as the voluntary liquidator of a company; (c) he or she acts as the receiver of the assets of a company; (d) he or she acts as an insolvency practitioner; (e) in any way, whether directly or indirectly, he or she is concerned with or takes part in the promotion, formation or management of a company; or (f) he or she undertakes any activity prescribed as a prohibited activity.

218 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS Application for and hearing of application for bankruptcy restrictions order
411. (1) The Official Receiver may apply to the Court for a bankruptcy
restrictions order against a bankrupt.
(2) On an application under subsection (1), the Court may, make a bankruptcy restrictions order against a bankrupt where it considers it appropriate having regard to the conduct of the bankrupt, whether before or after the making of the bankruptcy order against him or her. (3) Without limiting subsection (3), the Court shall in particular take into account— (a) any behaviour of the bankrupt that constitutes a bankruptcy offence, whether or not the bankrupt has been convicted of the offence; and (b) whether the bankrupt was an undischarged bankrupt at some time during the 6 years prior to the making of the bankruptcy order in respect of which the application is made. Duration of bankruptcy restrictions order
412. (1) The Court shall, on making a bankruptcy restrictions order, specify
the period for which the order has effect.
(2) The period referred to in subsection (1) shall commence on a date no earlier than the date of the order and no later than 28 days after the date of the order and shall not exceed 10 years. Interim bankruptcy restrictions order
413. (1) In this section, “interim order” means an interim bankruptcy
restrictions order.
(2) The Official Receiver may apply to the Court for an interim order at any time between— (a) the filing by him or her of an application for a bankruptcy restrictions order; and (b) the determination of that application. (3) The Court may, on an application made under subsection (1), make an interim order against a bankrupt if it considers— (a) that there are prima facie grounds to suggest that the application for the bankruptcy restrictions order will be successful; and (b) it is in the public interest to make an interim order. (4) An interim order shall— (a) take effect on the date that it is made; and (b) have the same effect as a bankruptcy restrictions order. (5) An interim order shall cease to have effect—

LAW OF VIRGIN ISLANDS Insolvency Act 219 Revision Date: 1 Jan 2020 (a) on the determination of the application for the bankruptcy restrictions order; (b) on the acceptance of a bankruptcy restrictions undertaking made by a bankrupt; or (c) on the discharge of the interim order by the Court on the application of the Official Receiver or the bankrupt. Bankruptcy restrictions undertaking
414. (1) A bankrupt may offer the Official Receiver a bankruptcy restrictions
undertaking, whether or not the Official Receiver has made an application against him or her for a bankruptcy restrictions order. (2) The Official Receiver may accept an offer made to him or her under subsection (1) if he or she considers that— (a) there is a reasonable prospect that, on the hearing of an application under section 411, the Court would make a bankruptcy restrictions order against the bankrupt offering the undertaking; and (b) it is expedient and in the public interest to accept the offer. (3) A bankruptcy restrictions undertaking shall specify a period, commencing on the date of the undertaking, for which the undertaking has effect. (4) The period referred to in subsection (3) shall not exceed 10 years. Variation of disqualification order or undertaking
415. (1) The Court may, on the application of the Official Receiver or a
restricted person, vary a bankruptcy restrictions order or a bankruptcy restrictions undertaking. (2) Without limiting subsection (1), an order under that subsection may— (a) reduce the period for which the order, or undertaking, is in force; or (b) provide for the order or undertaking to cease to be in force. (3) An application made by a restricted person for an order under subsection (1) shall be served on the Official Receiver no less than 14 days prior to the date of the hearing and the Official Receiver shall appear or be represented and is entitled to call or give evidence at the hearing. Offence provisions
416. A restricted person who engages in a prohibited activity commits an
offence.
Official Receiver to appear on certain applications
417. The Official Receiver shall appear and call the attention of the Court to
any matters which seem to him or her to be relevant, and may himself or herself give evidence or call witnesses on the hearing of—

220 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (a) an application by the Official Receiver for a bankruptcy restrictions order; or (b) any other application made under this Part. Register of disqualification orders
418. (1) The Official Receiver shall register in a Register of Bankruptcy
Restrictions Orders and Undertakings to be maintained by him or her for the purpose— (a) each bankruptcy restrictions order and interim bankruptcy restrictions order made or bankruptcy restrictions undertaking accepted under this Part; and (b) each variation of a bankruptcy restrictions order, an interim bankruptcy restrictions order or bankruptcy restrictions undertaking under this Part. (2) When a bankruptcy restrictions order or undertaking ceases to be in force, the Official Receiver shall delete the entry from the Register. (3) The Register of Bankruptcy Restrictions Orders and Undertakings shall be open to inspection on payment of such fee as may be prescribed. (4) No person shall be construed as having knowledge that another person is a restricted person by virtue of an entry in the Register of Bankruptcy Restrictions Orders and Undertakings. Annulment of bankruptcy order
419. (1) Where a bankruptcy order is annulled under section 382(1)(a)—
(a) any bankruptcy restrictions order, interim order or undertaking which is in force in respect of the bankrupt shall be annulled; (b) no new bankruptcy restrictions order or interim order may be made in respect of the bankrupt; and (c) no new bankruptcy restrictions undertaking by the bankrupt may be accepted. (2) Where a bankruptcy order is annulled under section 382(1)(b)— (a) the annulment shall not affect any bankruptcy restrictions order, interim order or undertaking which is in force in respect of the bankrupt; (b) the Court may make a bankruptcy restrictions order or an interim order in respect of the bankrupt on an application instituted before the annulment; (c) the Official Receiver may accept a bankruptcy restrictions undertaking offered by the bankrupt before the annulment; and (d) an application for a bankruptcy restrictions order may not be instituted after the annulment.

LAW OF VIRGIN ISLANDS Insolvency Act 221 Revision Date: 1 Jan 2020
PART XVI
GENERAL PROVISIONS WITH REGARD TO
INSOLVENCY PROCEEDINGS UNDER THIS ACT
Division 1
The Creditors’ Committee
Interpretation for and scope of this Division
420. (1) In this Division, “office holder” means—
(a) in respect of a company, its administrator, its liquidator or its administrative receiver and in respect of a foreign company, its liquidator; and (Amended by Act 11 of 2004) (b) in respect of an individual, his or her bankruptcy trustee, and a reference to an office holder is to the office holder appointed in the insolvency proceeding in respect of which the creditors’ committee is appointed. (2) This Division applies to the establishment and operation of a creditors’ committee under this Act where— (a) a company is in administration or in liquidation or a foreign company is in liquidation; (Amended by Act 11 of 2004) (b) an administrative receiver has been appointed in respect of a company; or (c) a bankruptcy order has been made against an individual. (3) In this Division, where the context requires, “company” includes a foreign company. (Amended by Act 11 of 2004) Establishment of creditors’ committee
421. (1) The creditors of a company in liquidation, administration or
administrative receivership or of a bankrupt may, by resolution passed at a meeting, establish a creditors’ committee— (a) in the case of a company in administration, at any time after the approval of the administrator’s proposals; (b) in the case of a company in administrative receivership, at any time after the appointment of the administrative receiver; (c) in the case of a company in liquidation, at any time after the appointment of the liquidator; and (d) in the case of an individual, at any time after the bankruptcy order. (2) A resolution to establish a creditors’ committee shall also appoint the first members of the committee, each of whom shall be eligible to serve on the committee in accordance with section 423. (3) A resolution to establish a creditors’ committee in the administration, administrative receivership or liquidation of a company may only be passed—

222 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (a) at a meeting called under section 100, 147 or 179; or (b) at a meeting requisitioned for the purpose by at least 10% in value of the creditors of the company. (4) A resolution to establish a creditors’ committee in the bankruptcy of an individual may be passed at a meeting of the creditors called under section 333. (5) Where an office holder is satisfied that a creditors’ committee has been validly established he or she shall, within 5 business days of the passing of the resolution, file a notice to that effect— (a) in the case of an administrator, a liquidator appointed by the Court or a bankruptcy trustee, with the Court; or (b) in the case of an administrative receiver or a liquidator not appointed by the Court, with the Registrar. (6) The notice required to be filed under subsection (5) shall specify the names and addresses of the persons appointed to the creditors’ committee. (7) The creditors’ committee cannot act until the relevant notice is filed by the office holder under subsection (5). (8) The appointment of a member of a creditors’ committee may be in the form of the appointment of a designated representative of the member. Functions and powers of creditors’ committee
422. (1) The functions of a creditors’ committee are—
(a) to consult with the office holder about matters relating to the insolvency proceeding; (b) to receive and consider reports of the insolvency holder; (c) to assist the office holder in discharging his or her functions; and (d) to discharge any other functions assigned to it under this Act or the Rules. (2) A creditors’ committee may— (a) call a meeting of creditors; (b) on giving the office holder reasonable notice, require him or her to provide the committee with such reports and information concerning the insolvency proceeding as the committee reasonably requires; and (Amended by Act 11 of 2004) (c) on giving the office holder not less than 5 business days notice, require him or her to attend before the committee at any reasonable time to provide it with such information and explanations concerning the insolvency proceeding as it reasonably requires. (3) Where the creditors’ committee requires the attendance of the office holder at a meeting under subsection (2)(c)— (a) the notice shall be signed in writing by a majority of the members of the committee; and

LAW OF VIRGIN ISLANDS Insolvency Act 223 Revision Date: 1 Jan 2020 (b) the meeting shall be fixed for a business day and shall be held at such time and place as the committee may agree with the office holder. (4) The designated representative of a committee member may sign a notice under subsection (3)(a) on the member’s behalf. (5) Unless expressly permitted to do so by the Act or the Rules, a creditors’ committee cannot give directions to the office holder. Composition of creditors’ committee
423. (1) Subject to subsection (2), a person is eligible to be a member, or the
designated representative of a member, of a creditors’ committee if he or she is an individual who has consented in writing to serve on the committee, and— (a) in the case of a member— (i) he or she is a creditor of the company or the bankrupt, as the case may be; or (ii) he or she holds a general power of attorney granted by such a creditor; or (b) in the case of a designated representative, he or she is authorised in writing by a person eligible to be a member to be his or her representative on the committee. (2) A person is not eligible to be a member of the creditors’ committee if his or her claim has been rejected for the purposes of his or her entitlement to vote or, in the case of a liquidation or bankruptcy, for distribution purposes, or if he or she is the legal practitioner or representative of such a creditor. (Amended by Act 11 of 2004) (3) A creditors committee shall consist of not less than 3 or more than 5 individuals who are eligible to be members of the committee. (Amended by Act 11 of 2004) Resignation and termination of committee member
424. (1) A member of a creditors’ committee may resign by giving notice in
writing to the office holder.
(2) The membership of a committee member is terminated if— (a) he or she becomes bankrupt or compounds or arranges with his or her creditors; (b) he or she is absent from 3 consecutive meetings of the committee without the leave of the other members; (ba) he or she ceases to be, or is found never to have been, a creditor; or (Inserted by Act 11 of 2004) (c) in the case of the designated representative of a member, his or her designation as a designated representative is terminated by the member he or she represents.

224 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (3) A member of the committee may be removed by a resolution of creditors of which he or she has been given at least 5 business days notice, stating the object of that meeting. (4) If a member of the creditors’ committee becomes bankrupt, his or her bankruptcy trustee replaces him or her as a member of the committee. (Inserted by Act 11 of 2004) Vacancies and appointment of new members
425. (1) Where there is a vacancy in the membership of the committee, the
continuing members of the committee, if not less than 2 in number, may continue to act. (2) The continuing members of the committee, or where their number has fallen below 2, the office holder, may appoint a person eligible under section 423 as a member of the committee to fill a vacancy. (3) Where there is any change in the membership of the committee, the office holder shall, within 5 business days, file a notice specifying the members of the committee following the change— (a) in the case of an administrator, a liquidator appointed by the Court or a bankruptcy trustee, with the Court; or (b) in the case of an administrative receiver or a liquidator appointed by the company, with the Registrar. (4) The notice required to be filed under subsection (3) shall specify the names and addresses of the members of the creditors’ committee. Proceedings of creditors’ committee
426. The Rules shall provide for the proceedings of a creditors’ committee.
Expenses of members
427. (1) Subject to subsection (2), the reasonable travelling expenses of
members directly incurred in attending a meeting of the creditors’ committee shall be paid by the office holder out of the assets of the company, or the bankrupt’s estate, as an expense of the insolvency proceeding. (2) Where the office holder is of the opinion that a meeting of the creditors’ committee called by a member was unreasonably called he or she may refuse to pay expenses under subsection (1). (3) Where the office holder refuses to pay reasonable travelling expenses under subsection (2), the creditors may resolve that they should be paid and upon the creditors passing such a resolution, they shall be paid by the office holder out of the assets of the company, or the bankrupt’s estate, as an expense of the insolvency proceeding. Members dealing with company
428. (1) In the case of the administration or administrative receivership of a
company, membership of the creditors’ committee does not prevent a person from dealing with the company while the office holder is acting, provided that

LAW OF VIRGIN ISLANDS Insolvency Act 225 Revision Date: 1 Jan 2020 any transactions in the course of such dealings are entered into in good faith and for value. (Amended by Act 11 of 2004) (2) The Court may, on the application of any person interested, set aside a transaction which appears to it to be contrary to the requirements of this section, and may give such consequential directions as it considers fit for compensating the company for any loss which it may have incurred in consequence of the transaction. (3) The Rules may specify procedures for dealing with potential or actual conflicts of interest of committee members. (Inserted by Act 11 of 2004) Formal defects
429. The acts of a creditors’ committee are valid notwithstanding any defect in
the appointment, election or qualifications of any member of the committee or in the formalities of its establishment. Division 2 Remuneration Remuneration of administrator, liquidator or bankruptcy trustee
430. (1) The remuneration of an administrator, liquidator or bankruptcy trustee
is fixed—
(a) by the creditors’ committee, if any; or (b) by the Court on an application made under subsection (2). (2) An administrator, liquidator or bankruptcy trustee may apply to the Court to fix his or her remuneration, or to fix an interim payment under section 433, if— (a) no creditors’ committee is appointed; (b) the creditors’ committee fails, for whatever reason, to fix his or her remuneration, or an interim payment; or (c) he or she considers that the remuneration, or an interim payment, fixed by the creditors’ committee— (i) is insufficient; (ii) is not in an appropriate currency; or (iii) is on unacceptable terms. (3) Not less than 14 days notice of an application under subsection (2) shall be given— (a) in the case of an administrator, to the company in administration; (b) in the case of a bankruptcy trustee, to the bankrupt; and (c) in any other case— (i) to each member of the creditors’ committee; or

226 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (ii) if there is no creditors’ committee, to such creditors as the Court may direct. (4) The members of the creditors’ committee or, if there is no creditors’ committee, the creditors given notice of the hearing may appear and be heard at the hearing of an application made under subsection (2). (5) On the hearing of an application under subsection (2), the Court shall fix the remuneration of the administrator, liquidator or bankruptcy trustee at such amount as it considers appropriate. (6) In this section, “liquidator” does not include a provisional liquidator. Application by creditors for reduction of remuneration
431. (1) Where the creditors’ committee has fixed the remuneration of an
administrator, liquidator or bankruptcy trustee, a creditor may, with the concurrence of at least 25% in value of the creditors, including himself or herself, apply to the Court for an order reducing the remuneration fixed on the grounds that it is excessive. (2) On an application made under subsection (1), the Court may— (a) if it considers that the applicant has not shown sufficient cause for a reduction, dismiss the application; or (b) set a venue for the application to be heard. (3) An application shall not be dismissed under subsection (2)(a) unless the Court has given the applicant the opportunity to attend the Court for an ex parte hearing, of which he or she has been given at least 7 days notice. (4) An applicant for an order under subsection (1) shall give the administrator, liquidator or bankruptcy trustee not less than 14 days notice of the date, time and place set by the Court under subsection (2). (5) If it considers that the remuneration of the administrator, liquidator or bankruptcy trustee fixed by the creditors’ committee is excessive, the Court shall fix the remuneration to such amount as it considers appropriate. General principles to be applied in fixing remuneration
432. (1) This section applies—
(a) to the fixing of the remuneration of an administrator, liquidator or bankruptcy trustee by a creditors committee under section 430; (b) to the fixing of the remuneration of an administrator, liquidator or bankruptcy trustee by the Court under section 430(5); (c) to the fixing of the remuneration of a provisional liquidator by the Court under section 172 and of a person appointed by the Court under section 307; (Amended by Act 11 of 2004) (d) to the fixing of the remuneration of a receiver by the Court under
section 134(2) or section 134(3);
(e) to the fixing of the remuneration of a supervisor or interim supervisor by the Court under section 17; and (Amended by Act 11 of 2004)

LAW OF VIRGIN ISLANDS Insolvency Act 227 Revision Date: 1 Jan 2020 (f) to the fixing of the remuneration of an administrator, liquidator or bankruptcy trustee by the Court under section 431. (Amended by Act 11 of 2004) (2) In this section and section 28— “fixing remuneration” includes fixing the currency of payment; “insolvency proceeding” means the insolvency proceeding in respect of which an insolvency practitioner is appointed; and “insolvency practitioner” means administrator, liquidator, bankruptcy trustee, receiver, supervisor or interim supervisor, as the case may be. (3) Subject to subsection (4), the remuneration of an insolvency practitioner shall be fixed by reference to the time properly given by him or her and his or her staff in carrying out his or her duties in the insolvency proceeding. (4) Where the insolvency practitioner so requests and the creditors’ committee or the Court considers that the circumstances justify it, the remuneration of an insolvency practitioner may be fixed in whole or in part as a percentage of the value of the assets realised and the value of the assets distributed, or as a percentage of either. (5) When fixing the remuneration of an insolvency practitioner in the circumstances specified in subsection (1) or sanctioning an interim payment under section 433(3), the creditors’ committee or the Court— (a) shall take into account— (i) the need for the remuneration to be fair and reasonable; (ii) the time properly spent by the insolvency practitioner and his or her staff in carrying out his or her duties; (iii) the complexity of the insolvency proceeding and whether the insolvency practitioner has been required to take any responsibility of an exceptional kind or degree; (iv) the effectiveness with which the insolvency practitioner is carrying out, or has carried out, his or her duties; (v) the value and nature of the assets with which the insolvency practitioner has had to deal; (vi) the hourly rates charged by other insolvency practitioners, both within and outside the Virgin Islands, in undertaking similar work; and (vii) whether any expenses which he or she incurred were properly incurred; and (b) may take into account— (i) the commercial and personal risks accepted by the insolvency practitioner; (Amended by Act 11 of 2004) (ii) the time spent by the insolvency practitioner and his or her staff outside the Virgin Islands and the amount of travelling required; and

228 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (iii) the standards and practice used for assessing remuneration in jurisdictions other than the Virgin Islands. Time for fixing remuneration and interim payments
433. (1) The remuneration of an office holder shall be fixed by the creditors’
committee or the Court after the conclusion of the insolvency proceeding. (2) In fixing the remuneration of an office holder, the creditors’ committee or the Court shall take account of any interim payment made under subsection (3). (3) Notwithstanding subsection (1), a creditors’ committee or the Court may at any time set an interim payment to be made to the insolvency practitioner on account of his or her remuneration. (4) An interim payment may be made under subsection (3) subject to such conditions as the creditors’ committee or the Court considers appropriate. (Amended by Act 11 of 2004)
PART XVII
NETTING AND FINANCIAL CONTRACTS
Interpretation for sections 434 and 435
434. (1) In this section and section 435—
“financial contract” means a contract of a type specified in the Rules as a financial contract; “master netting agreement” has the meaning specified in subsection (4); “multibranch netting agreement” (Repealed by Act 11 of 2004) “netting” means the termination of financial contracts, the determination of the termination values of those contracts and the set off of the termination values so determined so as to arrive at a net amount due, if any, by one party to the other where each such determination and set off is effected in accordance with the terms of a netting agreement between those parties; “netting agreement” has the meaning specified in subsection (2); “party” means a person constituting one of the parties to an agreement. (2) A netting agreement is an agreement between 2 parties only, in relation to present or future financial contracts between them the provisions of which include the termination of those contracts for the time being in existence, the determination of the termination values of those contracts and the set off of the termination values so determined so as to arrive at a net amount due. (3) A netting agreement may provide for— (a) a guarantee to be given to one party on behalf of the other party solely to secure the obligation of either party in respect of the financial contracts concerned; and

LAW OF VIRGIN ISLANDS Insolvency Act 229 Revision Date: 1 Jan 2020 (b) the set off against the net amount due under subsection (2) and that amount only of— (i) any money provided solely to secure the obligation of either party in respect of the financial contracts concerned; (ii) the proceeds of the enforcement and realisation of any collateral in the form of— (I) security interests or other assets provided; or (II) money, security interests or other assets provided solely to secure the obligation of the guarantor under paragraph (a), solely to secure the obligation of either party in respect of the financial contracts concerned. (4) A master netting agreement is an agreement between two parties only, in relation to netting agreements between them— (a) the provisions of which include the set off of the net amounts due under two or more netting agreements between them; and (b) which may provide for a guarantee to be given to one party on behalf of the other party solely to secure the obligation of either party in respect of the netting agreements concerned; and (c) which may provide for the set off against the net amount due under paragraph (a) and that amount only of— (i) any money provided solely to secure the obligation of either party in respect of the netting agreements concerned; (ii) the proceeds of the enforcement and realisation of any collateral in the form of— (I) security interests or other assets provided; or (II) money, security interests or other assets provided solely to secure the obligation of the guarantor under paragraph (b), solely to secure the obligation of either party in respect of the netting agreements concerned. Enforcement of netting agreements etc.
435. (1) Notwithstanding anything contained in this Act or the Rules or in any
rule of law relating to insolvency—
(a) the provisions relating to netting, the set off of money provided by way of security, the enforcement of a guarantee and the enforcement of a collateral arrangement and the set off of proceeds thereof, as contained within a netting agreement or a guarantee provided for in such an agreement shall be legally enforceable against a party to the agreement and, where applicable, against a guarantor or other person providing security; and (b) the provisions relating to set off of the net amounts due under netting agreements, the set off of money provided by way of security, the enforcement of a guarantee and the enforcement of a collateral arrangement and the set off of the proceeds thereof, as

230 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS contained within a master netting agreement or a guarantee provided for in such an agreement shall be legally enforceable against a party to the agreement and, where applicable, against a guarantor or other person providing security. (2) Nothing in subsection (1)— (a) prevents the application of this Act, any other enactment or rule of law which would prevent the legal enforceability of netting, set off, or enforcement in any particular case, on the grounds of fraud or misrepresentation or on any similar ground; or (b) permits the enforceability of netting, set off, or enforcement if any provision of an agreement between the two parties concerned would make netting, set off, enforcement and realisation void whether because of fraud or misrepresentation or any similar ground.
PART XVIII
CROSS-BORDER INSOLVENCY
General Provisions
Purpose and scope of this Part
436. (1) The purpose of this Part is to provide effective mechanisms for
dealing with cases of cross-border insolvency so as to promote the objectives of— (a) cooperation between— (i) the Court and insolvency administrators of the Virgin Islands; and (ii) the courts and other competent authorities of foreign countries involved in cases of cross-border insolvency; (b) greater legal certainty for trade and investment; (c) fair and efficient administration of cross-border insolvencies that protects the interests of all creditors and other interested persons, including the debtor; (d) protection and maximisation of the value of the debtor’s assets; and (e) facilitation of the rescue of financially troubled businesses, thereby protecting investment and preserving employment. (2) This Part applies where— (a) assistance is sought in the Virgin Islands by a foreign Court or a foreign representative in connection with a foreign proceeding; (b) assistance is sought in a foreign country in connection with a Virgin Islands insolvency proceeding;

LAW OF VIRGIN ISLANDS Insolvency Act 231 Revision Date: 1 Jan 2020 (c) a foreign proceeding and a Virgin Islands insolvency proceeding in respect of the same debtor are taking place concurrently; or (d) creditors or other interested persons in a designated foreign country have an interest in requesting the commencement of, or participating in, a Virgin Islands insolvency proceeding. (3) This Part does not apply to a regulated person who holds, or at any time has held, a prescribed financial services licence of a type designated by the Governor for the purposes of this section by notice published in the Gazette. Interpretation for this Part
437. (1) In this Part—
“designated foreign country” means a country or territory designated by the Governor for the purposes of this Part by notice published in the Gazette; “establishment” means any place of operations where the debtor carries out a non-transitory economic activity with human means and goods or services; “foreign ancillary proceeding” means a foreign proceeding, other than a foreign main proceeding, taking place in a country where the debtor has an establishment within the meaning of subparagraph (f) of this article; “foreign court” means a judicial or other authority competent to control or supervise a foreign proceeding; “foreign main proceeding” means a foreign proceeding taking place in the country where the debtor has the centre of his or her main interests; “foreign proceeding” means a collective judicial or administrative proceeding in a designated foreign country, including an interim proceeding, pursuant to a law relating to insolvency in which proceeding the property and affairs of the debtor are subject to control or supervision by a foreign court, for the purpose of reorganisation, liquidation or bankruptcy; “foreign representative” means a person or body, including one appointed on an interim basis, authorised in a foreign proceeding to administer the reorganisation or the liquidation of the debtor's property or affairs or to act as a representative of the foreign proceeding; “insolvency officer” means the Official Receiver, a liquidator, provisional liquidator, bankruptcy trustee, administrator, receiver, supervisor or interim supervisor; “Virgin Islands insolvency proceeding” means a collective judicial or administrative proceeding, including an interim proceeding, pursuant to this Act, or to any other enactment in the Virgin Islands; relating— (a) to the bankruptcy, liquidation, administration or receivership of a debtor; or (b) to the reorganisation of a debtor’s affairs, where, in all cases, the property of the debtor is or will be realised for the benefit of secured or unsecured creditors.

232 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (2) In the interpretation of this Part, the Court shall have regard to its international origin and to the need to promote an application of this Part that is consistent with the application of similar laws adopted by foreign jurisdictions. International obligations of the Virgin Islands
438. To the extent that this Part conflicts with an obligation of the Virgin
Islands arising out of any treaty or other form of agreement to which the Virgin Islands is a party with one or more other countries, the requirements of the treaty or agreement prevail. Public policy exception
439. Nothing in this Part prevents the Court from refusing to take an action
governed by this Part if the action would be contrary to the public policy of the Virgin Islands. Additional assistance
440. Subject to section 443, nothing in this Part limits the power of the Court
or an insolvency officer to provide additional assistance to a foreign representative where permitted under any other Part of this Act or under any other enactment or rule of law of the Virgin Islands. Application under this Part
441. An application under this Part shall be made to the Court in accordance
with the Rules.
Authorisation of insolvency officer to act in a foreign country
442. The Court may, on the application of an insolvency officer, authorise him
or her to act in a foreign country on behalf of a Virgin Islands insolvency proceeding as permitted by the applicable foreign law. Access of Foreign Representatives and Creditors to Courts in the Virgin Islands Right of direct access
443. (1) A foreign representative is entitled to apply to the Court under section
448 for recognition of the foreign proceeding in respect of which he or she is appointed. (2) Subject to section 453, a foreign representative may not be granted comity or cooperation by the Court unless the foreign proceeding in respect of which he or she is appointed has been granted recognition by the Court. (3) Upon recognition being granted to the foreign proceeding in respect of which a foreign representative is appointed, he or she may apply directly to the Court for comity or cooperation or for any other relief under this Part.

LAW OF VIRGIN ISLANDS Insolvency Act 233 Revision Date: 1 Jan 2020 Limited jurisdiction
444. The sole fact that a foreign representative makes an application under
section 448 does not subject the foreign representative to the jurisdiction of the
Court for any other purpose.
Commencement of and participation in a Virgin Islands insolvency proceeding by foreign representative
445. A foreign representative, upon the recognition of the foreign proceeding
in respect of which he or she is appointed, may— (a) apply to commence a Virgin Islands insolvency proceeding if the conditions for commencing such a proceeding are otherwise met; and (b) participate in a Virgin Islands insolvency proceeding regarding the debtor. Access of foreign creditors to a Virgin Islands proceeding
446. (1) Subject to subsection (2), foreign creditors have the same rights
regarding the commencement of, and participation in, a Virgin Islands insolvency proceeding as creditors in the Virgin Islands. (2) Subsection (1) does not affect the priority of claims in a Virgin Islands insolvency proceeding or the exclusion of foreign penal, revenue and social security claims from such a proceeding. Notification to foreign creditors of a Virgin Islands insolvency proceeding
447. (1) Whenever under a Virgin Islands insolvency proceeding notification
is to be given to creditors in the Virgin Islands, such notification shall also be given to the known creditors that do not have addresses in the Virgin Islands. (2) Where the address of any creditor is not known, the Court may order that appropriate steps be taken with a view to notifying that creditor. (3) Notification to creditors under subsection (1) shall be made to the foreign creditors individually, unless the Court considers that, under the circumstances, some other form of notification would be more appropriate. No letters rogatory or other, similar formality is required. (4) When notification of the commencement of a Virgin Islands insolvency proceeding is to be given to foreign creditors, the notification shall— (a) indicate the time period for submitting claims and specify the place for their submission; (b) indicate whether secured creditors need to submit their secured claims; and (c) contain any other information required to be included in such a notification to creditors pursuant to the law of the Virgin Islands and any order of the Court.

234 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (5) The Rules and any order of the Court as to notice or the submission of a claim time shall provide such additional time to creditors with foreign addresses as is reasonable under the circumstances. Recognition of Foreign Proceeding and Relief Application for recognition of foreign proceeding
448. (1) A foreign representative may apply to the Court for recognition of the
foreign proceeding in which the foreign representative has been appointed. (2) An application for recognition shall be accompanied by— (a) a certified copy of the decision commencing the foreign proceeding and appointing the foreign representative; or (b) a certificate from the foreign court affirming the existence of the foreign proceeding and of the appointment of the foreign representative; or (c) in the absence of evidence referred to in paragraphs (a) and (b), any other evidence acceptable to the Court of the existence of the foreign proceeding and of the appointment of the foreign representative. (3) An application for recognition shall also be accompanied by a statement identifying all foreign proceedings in respect of the debtor that are known to the foreign representative. (4) If the documents referred to in subsection (2)(a) and (b) are not in English, they shall be accompanied by a certified translation of the documents into English. (5) The Court may require a certified translation of any other documents supplied in support of the application for recognition into English. Presumptions concerning recognition
449. (1) If the decision or certificate referred to in section 448(2) indicates that
the proceeding is a foreign proceeding as defined in section 437(1)and that the person or body is a foreign representative as defined in section 437(1), the Court is entitled to so presume. (2) The Court is entitled to presume that documents submitted in support of the application for recognition are authentic, whether or not they have been legalised. (3) In the absence of proof to the contrary, the debtor’s registered office, or habitual residence in the case of an individual, is presumed to be the centre of the debtor’s main interests. Recognition of foreign proceedings
450. (1) Subject to section 439, a foreign proceeding shall be recognised if—
(a) the proceeding is a foreign proceeding within the meaning of
section 437(1);

LAW OF VIRGIN ISLANDS Insolvency Act 235 Revision Date: 1 Jan 2020 (b) the person or body applying for recognition is a foreign representative within the meaning of section 437(1); (c) the application meets the requirements of section 448(2); and (d) the application has been made in accordance with this Part and the Rules. (2) The foreign proceeding shall be recognised— (a) as a foreign main proceeding if it is taking place in the country where the debtor has the centre of his or her main interests; or (b) as a foreign ancillary proceeding if the debtor has an establishment in the foreign country. (3) An application for recognition of a foreign proceeding shall be decided upon at the earliest possible time. (4) The provisions of this Part do not prevent the modification or termination of recognition if it is shown that the grounds for granting it were fully or partially lacking or have ceased to exist. Subsequent information
451. After the filing of an application for recognition of a foreign proceeding,
the foreign representative shall inform the Court promptly of— (a) any substantial change in the status of the recognised foreign proceeding or the status of the foreign representative’s appointment; and (b) any other foreign proceeding regarding the same debtor that becomes known to the foreign representative. Interim relief
452. (1) Where an application for recognition of a foreign proceeding has been
filed but not yet determined or withdrawn, the Court may, on the application of the foreign representative concerned, if it is satisfied that relief is urgently needed to protect the assets of the debtor or the interests of the creditors, grant such relief of a provisional nature as it considers appropriate, including— (a) staying execution against the debtor’s assets; (b) entrusting the administration or realisation of all or part of the debtor’s assets located in the Virgin Islands to the foreign representative or to another person designated by the Court, in order to protect and preserve the value of assets that, by their nature or because of other circumstances, are perishable, susceptible to devaluation or otherwise in jeopardy; (c) any relief mentioned in section 454(1)(c), (d) and (f). (2) The foreign representative in whose favour an order is made under subsection (1) shall notify the debtor of the order as soon as practicable or within such time as the Court may order. (3) Unless extended under section 454(1)(f), the relief granted under this
article terminates when the Court determines the application for recognition.

236 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (4) The Court may refuse to grant relief under this section if such relief would interfere with the administration of a foreign main proceeding. Effects of recognition of foreign main proceeding
453. (1) Upon recognition of a foreign proceeding that is a foreign main
proceeding—
(a) commencement or continuation of individual actions or individual proceedings concerning the property of the debtor within the Virgin Islands, rights, obligations or liabilities is stayed; (b) execution against the debtor’s property within the Virgin Islands is stayed; and (c) the right to transfer, encumber or otherwise dispose of any property of the debtor within the Virgin Islands is suspended. (2) Notwithstanding subsection (1), the Court may, on the application of any creditor or interested person, order that the stay or suspension does not apply in respect of any particular action or proceeding or in respect of any particular property, rights, obligation or liability. (3) An order under subsection (2) may be made subject to such terms as it considers fit. (4) Subsection (1)(a) does not affect the right to commence individual actions or proceedings to the extent necessary to preserve a claim against the debtor. (5) Subsection (1) does not affect the right to request the commencement of a Virgin Islands insolvency proceeding or the right to file claims in such a proceeding. Relief that may be granted upon recognition of foreign proceeding
454. (1) Upon recognition of a foreign proceeding, whether main or ancillary,
where necessary to protect the assets of the debtor or the interests of the creditors, the Court may, at the request of the foreign representative, grant any appropriate relief, including— (a) staying the commencement or continuation of individual actions or individual proceedings concerning the debtor’s property, rights, obligations or liabilities, to the extent they have not been stayed under section 453(1)(a); (b) staying execution against the debtor’s property to the extent it has not been stayed under section 453(1)(b); (c) suspending the right to transfer, encumber or otherwise dispose of any property of the debtor to the extent this right has not been suspended under section 453(1)(c); (d) providing for the examination of witnesses, the taking of evidence or the delivery of information concerning the debtor’s assets, affairs, rights, obligations or liabilities;

LAW OF VIRGIN ISLANDS Insolvency Act 237 Revision Date: 1 Jan 2020 (e) entrusting the administration or realisation of all or part of the debtor’s assets located in Virgin Islands to the foreign representative or another person designated by the Court; (f) extending relief granted under section 452(1). (2) Upon recognition of a foreign proceeding, whether main or ancillary, the Court may, at the request of the foreign representative, entrust the distribution of all or part of the debtor's property located in the Virgin Islands to the foreign representative or another person designated by the Court, provided that the Court is satisfied that the interests of creditors in the Virgin Islands are adequately protected. (3) In granting relief under this section to a representative of a foreign ancillary proceeding, the Court shall be satisfied that the relief relates to property that, under the law of the Virgin Islands, should be administered in the foreign ancillary proceeding or concerns information required in that proceeding. Protection of creditors and other interested persons
455. (1) In granting or denying relief under section 452 or 454, or in
modifying or terminating relief under subsection (3), the Court shall be satisfied that the interests of the creditors and other interested persons, including the debtor, are adequately protected. (2) The Court may subject relief granted under section 452 or 454 to such conditions as it considers appropriate, including the giving of any security interest or the filing of any bond. (3) The Court may, at the request of the foreign representative or a person affected by relief granted under section 452 or 454, or at its own motion, modify or terminate the relief. Actions to avoid acts detrimental to creditors
456. (1) Subject to subsection (2), upon recognition of a foreign proceeding,
the foreign representative shall have power to apply to the Court for an order under section 249 or 405, as the case may be. (2) The Court shall not make an order under section 249 or 405 on the application of the foreign representative of a recognised foreign proceeding unless it is satisfied that— (a) in the case of an application under section 249, the foreign representative has roles and functions that are equivalent or broadly similar to the roles and functions of a liquidator appointed under this Act; and (b) in the case of an application under section 405, the foreign representative has roles and functions that are equivalent or broadly similar to the roles and functions of a bankruptcy trustee appointed under this Act. (3) When the foreign proceeding is a foreign ancillary proceeding, the Court shall be satisfied that the action relates to property that, under the law of the Virgin Islands, should be administered in the foreign ancillary proceeding.

238 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS Intervention by foreign representative in proceedings in the Virgin Islands
457. Upon recognition of a foreign proceeding, the foreign representative may,
if the requirements of the law of the Virgin Islands are met, intervene in any proceedings in which the debtor is a party. Cooperation with Foreign Courts and Foreign Representatives Cooperation and direct communication between court of the Virgin Islands and foreign courts or foreign representatives
458. (1) In matters referred to in section 436, the Court shall cooperate to the
maximum extent possible with foreign courts or foreign representatives, either directly or through an insolvency administrator. (2) The Court is entitled to communicate directly with, or to request information or assistance directly from, foreign courts or foreign representatives, subject to the rights of parties to notice and participation at hearings. Cooperation and direct communication between the insolvency administrator and foreign courts or foreign representatives
459. (1) In matters referred to in section 436, an insolvency administrator
shall, in the exercise of his or her functions and subject to the supervision of the Court, cooperate to the maximum extent possible with foreign courts or foreign representatives. (2) Subject to section 442, the insolvency administrator is entitled, in the exercise of his or her functions and subject to the supervision of the Court, to communicate directly with foreign courts or foreign representatives. Forms of cooperation
460. Cooperation referred to in sections 458 and 459 may be implemented by
any appropriate means, including—
(a) appointment of a person or body to act at the direction of the Court; (b) communication of information by any means considered appropriate by the Court; (c) coordination of the administration and supervision of the debtor’s property and affairs; (d) approval or implementation by courts of agreements concerning the coordination of proceedings; (e) coordination of concurrent proceedings regarding the same debtor.

LAW OF VIRGIN ISLANDS Insolvency Act 239 Revision Date: 1 Jan 2020 Concurrent Proceedings Commencement of a Virgin Islands insolvency proceeding after recognition of foreign main proceeding
461. After recognition of a foreign main proceeding, a Virgin Islands
insolvency proceeding may be commenced only if the debtor has assets in the Virgin Islands and the effects of the Virgin Islands proceeding shall be restricted to the assets of the debtor that are located in the Virgin Islands and, to the extent necessary to implement cooperation and coordination under sections 458, 459 and 460, to other property of the debtor that, under the law of the Virgin Islands, should be administered in the recognised proceeding. Coordination of a Virgin Islands insolvency proceeding and foreign proceeding
462. Where a foreign proceeding and a Virgin Islands insolvency proceeding
are taking place concurrently regarding the same debtor, the Court shall seek cooperation and coordination under sections 458, 459 and 460, and the following shall apply— (a) when the Virgin Islands insolvency proceeding is taking place at the time the application for recognition of the foreign proceeding is filed— (i) any relief granted under section 452 or 454 shall be consistent with the Virgin Islands insolvency proceeding; and (ii) if the foreign proceeding is recognised in the Virgin Islands as a foreign main proceeding, section 453 does not apply; (b) when the Virgin Islands insolvency proceeding commences after recognition, or after the filing of the application for recognition, of the foreign proceeding— (i) any relief in effect under section 452 or 454 shall be reviewed by the Court and shall be modified or terminated if inconsistent with the Virgin Islands insolvency proceeding; and (ii) if the foreign proceeding is a foreign main proceeding, the stay and suspension referred to in section 453(1) shall be modified or terminated pursuant to section 453(2) if inconsistent with the Virgin Islands insolvency proceeding; (c) in granting, extending or modifying relief granted to a representative of a foreign ancillary proceeding, the Court shall be satisfied that the relief relates to property that, under the law of the Virgin Islands, should be administered in the foreign ancillary proceeding or concerns information required in that proceeding. Coordination of more than one foreign proceeding
463. In matters referred to in section 436, in respect of more than one foreign
proceeding regarding the same debtor, the Court shall seek cooperation and coordination under sections 458, 459 and 460 and the following shall apply—

240 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (a) any relief granted under section 452 or 454 to a representative of a foreign ancillary proceeding after recognition of a foreign main proceeding shall be consistent with the foreign main proceeding; (b) if a foreign main proceeding is recognised after recognition, or after the filing of an application for recognition, of a foreign ancillary proceeding, any relief in effect under section 452 or 454 shall be reviewed by the Court and shall be modified or terminated if inconsistent with the foreign main proceeding; (c) if, after recognition of a foreign ancillary proceeding, another foreign ancillary proceeding is recognised, the Court shall grant, modify or terminate relief for the purpose of facilitating coordination of the proceedings. Presumption of insolvency based on recognition of foreign main proceeding
464. In the absence of evidence to the contrary, recognition of a foreign main
proceeding is, for the purpose of commencing a Virgin Islands insolvency proceeding proof that the debtor is insolvent. Rule of payment in concurrent proceedings
465. Without prejudice to secured claims or rights in rem, a creditor who has
received part payment in respect of his or her claim in a proceeding pursuant to a law relating to insolvency in a foreign country may not receive a payment for the same claim in a Virgin Islands insolvency proceeding regarding the same debtor, so long as the payment to the other creditors of the same class is proportionately less than the payment the creditor has already received.
PART XIX
ORDERS IN AID OF FOREIGN PROCEEDINGS
Interpretation for this Part
466. (1) In this Part—
“foreign proceeding” means a collective judicial or administrative proceeding in a relevant foreign country, including an interim proceeding, pursuant to a law relating to insolvency in which proceeding the property and affairs of the debtor are subject to control or supervision by a foreign court, for the purpose of reorganisation, liquidation or bankruptcy and “debtor” shall be construed accordingly; “foreign representative” means a person or body, including one appointed on an interim basis, authorised in a foreign proceeding to administer the reorganisation or the liquidation of the debtor's property or affairs or to act as a representative of the foreign proceeding; “insolvency officer” means the Official Receiver, a liquidator, provisional liquidator, bankruptcy trustee, administrator, receiver, supervisor, or interim supervisor;

LAW OF VIRGIN ISLANDS Insolvency Act 241 Revision Date: 1 Jan 2020 “relevant foreign country” means a country, territory or jurisdiction designated by the Commission as a relevant foreign country for the purposes of this
Part; and
“Virgin Islands insolvency proceeding” means a collective judicial or administrative proceeding, including an interim proceeding, pursuant to this Act, or to any other enactment in the Virgin Islands, relating— (a) to the bankruptcy, liquidation, administration or receivership of a debtor; or (b) to the reorganisation of a debtor’s affairs, where, in all cases, the property of the debtor is or will be realised for the benefit of secured or unsecured creditors. (2) Notwithstanding subsection (1), a country or territory that is designated as a designated country for the purposes of Part XVIII ceases to be a relevant foreign country from the date of its designation as a designated country. (3) The designation of a country for the purposes of Part XVIII does not affect the validity of any order made under this Part. Order in aid of foreign proceeding
467. (1) For the purposes of this section “property” means property that is
subject to or involved in the foreign proceeding in respect of which the foreign representative is authorised. (2) A foreign representative may apply to the Court for an order under subsection (3) in aid of the foreign proceeding in respect of which he or she is authorised. (3) Subject to section 468, upon an application under subsection (1), the Court may— (a) restrain the commencement or continuation of any proceedings, execution or other legal process or the levying of any distress against a debtor or in relation to any of the debtor’s property; (b) subject to subsection (4), restrain the creation, exercise or enforcement of any right or remedy over or against any of the debtor’s property; (c) require any person to deliver up to the foreign representative any property of the debtor or the proceeds of such property; (d) make such order or grant such relief as it considers appropriate to facilitate, approve or implement arrangements that will result in a co-ordination of a Virgin Islands insolvency proceeding with a foreign proceeding; (e) appoint an interim receiver of any property of the debtor for such term and subject to such conditions as it considers appropriate; (f) authorise the examination by the foreign representative of the debtor or of any person who could be examined in a Virgin Islands insolvency proceeding in respect of a debtor; (g) stay or terminate or make any other order it considers appropriate in relation to a Virgin Islands insolvency proceeding; or

242 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (h) make such order or grant such other relief as it considers appropriate. (4) An order under subsection (3) shall not affect the right of a secured creditor to take possession of and realise or otherwise deal with property of the debtor over which the creditor has a security interest. (5) In making an order under subsection (3), the Court may apply the law of the Virgin Islands or the law applicable in respect of the foreign proceeding. Matters to be considered by Court in determining application under
section 467
468. (1) In determining an application under section 467, the Court shall be
guided by what will best ensure the economic and expeditious administration of the foreign proceeding to the extent consistent with— (a) the just treatment of all persons claiming in the foreign proceeding; (b) the protection of persons in the Virgin Islands who have claims against the debtor against prejudice and inconvenience in the processing of claims in the foreign proceeding; (c) the prevention of preferential or fraudulent dispositions of property subject to the foreign proceeding, or the proceeds of such property; (d) the need for distributions to claimants in the foreign proceedings to be substantially in accordance with the order of distributions in a Virgin Islands insolvency; and (e) comity. (2) An order under section 467 shall not, without the consent of the person concerned— (a) affect the right of any creditor of the debtor to benefit from set-off as provided for in section 150; or (b) result in a person who is a preferential creditor of the debtor, or who in a Virgin Islands insolvency proceeding in respect of the debtor would be a preferential creditor, receiving less than he or she would receive in a Virgin Islands insolvency proceeding. (3) The Court shall not make an order under 467 that is contrary to the public policy of the Virgin Islands. Limitation on effect of application under this Part
469. (1) Subject to subsection (2), an application to the Court by a foreign
representative under section 467 does not submit the foreign representative to the jurisdiction of the Court for any other purpose except with regard to the costs of the proceedings. (2) The Court may make an order under this Part conditional on the compliance by the foreign representative with any other order of the Court.

LAW OF VIRGIN ISLANDS Insolvency Act 243 Revision Date: 1 Jan 2020 Additional assistance
470. Subject to section 443, nothing in this Part limits the power of the Court
or an insolvency officer to provide additional assistance to a foreign representative where permitted under any other Part of this Act or under any other enactment or rule of law of the Virgin Islands. Application under this Part
471. An application by a foreign representative under this Part shall be made to
the Court in accordance with the Rules.
Authorisation of insolvency officer to act in foreign country
472. The Court may, on the application of an insolvency officer, authorise him
or her to act in a foreign country on behalf of a Virgin Islands insolvency proceeding as permitted by the applicable foreign law.
PART XX
INSOLVENCY PRACTITIONERS
Licensing
Interpretation for this Part
473. In this Part—
“Code of Practice” means the Code of Practice that the Commission is empowered to issue under section 487(1); “Commission” means the Financial Services Commission established under the Financial Services Commission Act; “licence” means a licence to act as an insolvency practitioner granted under
section 476;
“licensee” means a licensed insolvency practitioner; “overseas insolvency practitioner” means an individual resident outside the Virgin Islands appointed to act as an insolvency practitioner under section 483; and “Regulations” means the Insolvency Practitioners Regulations made under
section 486.
Prohibition on acting as insolvency practitioner without a licence
474. (1) For the purposes of this Act, a person acts as an insolvency
practitioner by acting as—
(a) the administrator or administrative receiver of a company; (b) the liquidator or provisional liquidator of a company or a foreign company;

244 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (ba) a portfolio liquidator appointed under section 152 of the BVI Business Companies Act; (Inserted by Act 16 of 2004) (c) the interim supervisor under a proposal for an arrangement; (d) the supervisor of an arrangement; or (e) the bankruptcy trustee of an individual. (2) Subject to subsection (3), no person shall act as an insolvency practitioner unless he or she holds a licence issued under section 476 that is not suspended under section 479. (3) Subsection (2) does not apply— (a) to the Official Receiver; or (b) to an overseas insolvency practitioner whilst he or she is acting jointly with a licensee or with the Official Receiver. (4) A person who contravenes subsection (2) commits an offence. Application for licence
475. (1) An individual resident in the Virgin Islands may apply to the
Commission for a licence to act as an insolvency practitioner. (2) An application under subsection (1) shall— (a) contain the information and be in the form prescribed; and (b) be accompanied by the documentation prescribed. (3) The Commission may require an applicant for a licence to furnish it with such other documentation and information as it considers necessary to determine the application. Issue of licence
476. (1) The Commission may issue a licence to the applicant if it is
satisfied—
(a) that the applicant—
(i) is an individual resident in the Virgin Islands who is fit and proper and qualified to act as an insolvency practitioner; (ii) satisfies the requirements of this Act in respect of the application and will, upon issuance of the licence, be in compliance with this Act and the Regulations; and (iii) is not disqualified from holding a licence under section 477; and (b) that issuing the licence is not against the public interest. (2) A licence may be issued under subsection (1) subject to such terms and conditions as the Commission considers fit. (3) The Commission shall not be required to disclose to an applicant the reasons for a decision under this section.

LAW OF VIRGIN ISLANDS Insolvency Act 245 Revision Date: 1 Jan 2020 (4) The Commission may, upon giving reasonable notice to the licensee— (a) vary or cancel any terms or conditions imposed under subsection (1); or (b) impose new terms or conditions. (5) The Commission shall publish the issuance of a licence under this
section in the Gazette.
Persons disqualified from holding a licence
477. An individual is disqualified from holding a licence if—
(a) he or she is a bankrupt; or
(b) he or she is a disqualified person within the meaning of section 260(4) or a restricted person within the meaning of section 409. (Amended by Act 11 of 2004) Control of Licensees and Enforcement Production of accounts and records
478. (1) The Commission may, at any time during or after the completion of
an insolvency proceeding, require a licensee appointed in respect of the proceeding to produce for inspection, at such place as he or she may specify— (a) his or her records and accounts in respect of the proceeding; and (b) any reports that he or she has prepared in respect of the proceeding. (2) The Commission may cause the accounts and records produced to him or her under subsection (1) to be audited. (3) The licensee shall give the Commission such further information, explanations and assistance in relation to the records, accounts and reports as the Commission may require. (4) A licensee who contravenes this section commits an offence. Suspension and revocation of licence
479. (1) The Commission shall suspend or revoke the licence of a licensee if—
(a) in the opinion of the Commission, the licensee is no longer a fit and proper person to hold a licence; (b) the licensee is disqualified from holding a licence; or (Amended by Act 11 of 2004) (c) he or she is no longer resident in the Virgin Islands. (Inserted by Act 11 of 2004) (2) The Commission may suspend or revoke the licence of a licensee if the licensee— (a) is in breach of any condition of his or her licence;

246 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (b) has failed to comply with his or her obligations under this Part, the Regulations or the Code of Practice; (Amended by Act 11 of 2004) (c) has provided the Commission with any false, inaccurate or misleading information, whether on making application for a licence or subsequent to the issue of the licence; (d) has committed an offence under this Act; (Amended by Act 11 of 2004) (e) has failed to pay the prescribed annual fee payable within six weeks of the date upon which it fell due for payment; or (f) he or she fails to comply with a directive issued by the Commission under section 480A. (Inserted by Act 11 of 2004) (3) The Commission may revoke the licence of a licensee if requested to do so by the licensee. (4) Subject to subsection (5), the period of suspension of a licence under subsection (1) shall not exceed 30 days. (5) If it is satisfied that it is in the public interest to do so, the Court may, on the application of the Commission, extend the period of suspension of a licence under this section for one or more further periods not exceeding 30 days each. (6) Before suspending or revoking a licence under subsections (1) or (2), the Commission shall give written notice to the licensee stating— (a) the grounds upon which it intends to revoke or suspend the licence; and (b) that unless the licensee, by written notice filed with the Commission, shows good reason why its licence should not be revoked or suspended, the licence will be revoked or suspended, as the case may be, on a date not less than 14 days after the date of the notice. (7) Where the Commission revokes or suspends a licence under this
section, it shall send a written notice to the licensee stating—
(a) that the licence has been revoked or suspended, as the case may be; and (b) the grounds upon which and the date from which the licence has been revoked or suspended. (8) Where the Commission revokes or suspends a licence under this
section, it shall cause notice of the revocation or suspension to be published in
the Gazette.
Right to make representations
480. (1) A licensee who receives a notice given under 479(6) may, within 14
days of the date of the notice, make written representations to the Commission. (2) The Commission shall consider the representations made to it under subsection (1) in determining whether to suspend or revoke the licence.

LAW OF VIRGIN ISLANDS Insolvency Act 247 Revision Date: 1 Jan 2020 Directives 480A. (1) Where the Commission is entitled to revoke or suspend the licence of a licensee under section 479(2), the Commission may issue one or more of the following directives— (a) that the licensee shall take all necessary steps to resign as an insolvency practitioner in respect of certain specified insolvency matters or specified types or descriptions of insolvency matters; (b) that the licensee shall not accept any new appointments as an insolvency practitioner or any new appointments of a specified type or description; (c) that the licensee shall take such other action as the Commission considers may be necessary to ensure that he or she properly fulfils his or her duties as an insolvency practitioner either generally or in respect of particular insolvency matters. (2) Without limiting subsection (1), where it considers it necessary for the exercise of its functions or for the proper supervision of insolvency practitioners, the Commission may issue directives of a special or general nature not inconsistent with this Part. (3) Where the Commission issues a directive of a general nature under subsection (2), it shall cause the directive to be advertised in the Gazette. (Inserted by Act 11 of 2004) Obligations of Licensees Filing of returns and other documents
481. A licensee shall file with the Commission such returns and other
documents as may be specified in the Regulations or the Code of Practice. Eligible Insolvency Practitioners Eligible insolvency practitioner
482. (1) A person is eligible to act as an insolvency practitioner in relation to a
company, a foreign company or an individual if— (a) he or she is a licensed insolvency practitioner; (b) he or she has given his or her written consent to act in the prescribed form; (c) he or she is not disqualified from holding a licence under section 477; (d) he or she is not disqualified from acting— (i) in the case of a company or a foreign company, under subsection (2); or (ii) in the case of an individual, under subsection (3); and

248 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (e) there is in force such security for the proper performance of his or her functions as may be specified in the Regulations. (2) A person is disqualified from acting as an insolvency practitioner in respect of a company and a foreign company if he or she is, or at any time in the previous 3 years has been— (a) the auditor of the company or an employee of such auditor; or (b) a director of the company. (3) An insolvency practitioner is disqualified from acting as an insolvency practitioner in respect of an individual if he or she is connected to the individual within the meaning of section 5(3). Appointment of overseas insolvency practitioner
483. Notwithstanding any other provision of this Act, an individual resident
outside the Virgin Islands may be appointed to act as an insolvency practitioner jointly with a licensee or the Official Receiver if— (a) where he or she is appointed by the Court, or in any other case the person or persons appointing him or her, is or are satisfied that— (i) he or she has sufficient qualifications and experience to act in the insolvency proceeding in respect of which the appointment is made; (ii) he or she has given his or her written consent to act in the prescribed form; (iii) he or she is not disqualified from holding a licence under
section 477;
(iv) he or she is not disqualified from acting in the case of a company or a foreign company, under subsection 482(2) or in the case of an individual, under subsection 482(3); (v) there is in force such security for the proper performance of his or her functions as may be specified in the Regulations; and (b) prior written notice of his or her appointment has been given to the Commission. Commission’s powers with regard to appointment of overseas insolvency practitioner
484. (1) Where an application is made to the Court for the appointment of an
overseas insolvency practitioner to act as insolvency practitioner, the Commission may appear and be heard at the hearing of the application for the purpose of objecting to the appointment. (2) Where the Commission receives notice under section 483(b) that an overseas insolvency practitioner is to be appointed by a person to act as an insolvency practitioner, it may give the appointer notice that it intends to apply to the Court for an order that the overseas insolvency practitioner concerned should not be appointed.

LAW OF VIRGIN ISLANDS Insolvency Act 249 Revision Date: 1 Jan 2020 (3) Where a person receives a notice from the Commission under subsection (2), it shall not appoint the overseas insolvency practitioner concerned to act as insolvency practitioner unless— (a) the Court approves the appointment at the hearing of the Commission’s application under subsection (2); or (b) the Commission approves the appointment. (4) A person who contravenes subsection (3) commits an offence. Overseas practitioner sole appointee
485. (1) This section applies where a licensee, for any reason, ceases to act in
an insolvency proceeding and an overseas insolvency practitioner appointed jointly with him or her remains as the only insolvency practitioner appointed in the insolvency proceeding. (2) Where this section applies, the overseas practitioner shall within 3 days after becoming aware that he or she is the only person acting as insolvency practitioner in an insolvency proceeding, give notice in the prescribed form— (a) to the Court, where the Court appointed him or her, or to such person or persons as appointed him or her; and (b) to the Official Receiver. (3) An overseas insolvency practitioner to whom subsection (1) applies is deemed not to be in contravention of section 474(2) — (a) where he or she gives notice in compliance with subsection (2), at any time during the period commencing with the date upon which he or she became the only person acting as insolvency practitioner in the insolvency proceeding and ending on the later of— (i) the 14th day after the date on which he or she became the only person acting as insolvency practitioner in the insolvency proceeding; or (ii) the seventh day after the date upon which he or she became aware that was the only person acting as insolvency practitioner in the insolvency proceeding; or (b) at any time when he or she does not know and could not be expected to have known that he or she is the only person acting in the insolvency proceeding. Regulations
486. (1) The Cabinet may, on the recommendation of the Commission, make
Regulations generally for giving effect to this Part and specifically in respect of— (a) the form and contents of, and the documents that shall accompany, an application for a licence under this Part; (b) the qualifications and experience required of and examinations to be taken and passed by applicants for a licence;

250 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (c) the minimum security, including insurance cover, to be maintained by a licensee; (d) the records to be kept by a licensee, and the length of time such records shall be kept; (e) the inspection by the Commission of the records of a licensee; (f) documents to be filed with and returns to be made to the Commission by licensees; (fa) the submission to the Commission of complaints and the procedures for dealing with such complaints; (Inserted by Act 11 of 2004) (g) fees payable on application for a licence and by licensees generally; and (h) any other matter required or permitted by this Part to be specified in the Regulations. (Amended by Act 11 of 2004) (2) The Regulations may— (a) make different provision in relation to different persons, circumstances or cases; (b) where a minimum standard, including a minimum level of security, is specified, authorise the Commission to impose a higher standard or a greater level of security, according to the circumstances of a particular licensee or insolvency proceeding; and (c) provide for offences and penalties for any prohibition or contravention or failure to comply with a requirement prescribed in the Regulations. (3) The Regulations, and any amendment to the Regulations, shall be published in the Gazette. (4) Sections 494, 495, 496 and 502 apply in respect of the Regulations. (Inserted by Act 11 of 2004) Code of Practice
487. (1) Subject to subsections (2) and (3), the Commission may issue a Code
of Practice with respect to—
(a) the criteria that will be used in assessing applications for a licence, including the criteria for determining whether or not an individual is to be regarded as being resident in the Virgin Islands; and (b) the procedures to be followed by and the conduct expected of a licensee when acting as an insolvency practitioner. (2) The Code of Practice shall not be inconsistent with the Act, the Rules or the Regulations.

LAW OF VIRGIN ISLANDS Insolvency Act 251 Revision Date: 1 Jan 2020 (3) The Regulations may specify matters that shall or may be included in the Code of Practice, including the matters specified in section 486(1), and may limit the scope of the Code of Practice. (Amended by Act 11 of 2004) (4) The Code of Practice may make different provision in relation to different persons, circumstances or cases. (5) The Commission shall publish the Code of Practice and any amendments thereto in the Gazette. Insolvency Surplus Account 487A. (1) The Commission shall open and maintain an account called the Insolvency Surplus Account with a reputable bank licensed and operating in the Virgin Islands. (2) The Commission shall pay into the Insolvency Surplus Account all monies representing the unclaimed assets of companies and bankrupts that are received by it in accordance with the Rules. (3) The Rules may provide for the management of the Insolvency Surplus Account by the Commission, the investment of monies held in the Insolvency Surplus Account and the circumstances in which monies shall or may be paid into and out of the Insolvency Surplus Account. (Inserted by Act 11 of 2004)
PART XXI
OFFICIAL RECEIVER
Official Receiver
488. (1) The Commission shall appoint a suitably qualified and experienced
person to be Official Receiver on such terms and conditions as it considers appropriate. (2) The Official Receiver is an employee of the Commission. Deputy Official Receiver and staff
489. The Commission shall appoint one of its officers as Deputy Official
Receiver and shall provide the Official Receiver with such other staff and resources as he or she requires to perform his or her functions under this Act and the Rules. Official Receiver as officer of the Court
490. For the purposes of the performance of his or her functions under this Act
and the Rules, the Official Receiver is an officer of the Court and him or her— (a) may apply to the Court for directions in connection with his or her functions; and (b) shall comply with any directions given to him or her by the Court.

252 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS Functions of Official Receiver
491. (1) The Official Receiver has the duties, powers and functions imposed or
conferred on him or her by this Act, any other enactment, the Rules and the Regulations. (Amended by Act 11 of 2004) (2) Any assets vested in the Official Receiver on his or her dying or otherwise ceasing to hold office, vest in his or her successor without any conveyance, assignment or transfer. (3) Subject to any provision in this Act or the Rules to the contrary, a reference to the liquidator, supervisor, interim supervisor, receiver or bankruptcy trustee includes the Official Receiver when acting in that capacity. Right of audience
492. The Official Receiver and the Deputy Official Receiver have a right of
audience in insolvency proceedings before the Court.
PART XXII
MISCELLANEOUS PROVISIONS
Appointment of 2 or more office holders
493. (1) Where this Act provides for the appointment of a liquidator,
provisional liquidator, administrator, bankruptcy trustee, supervisor or interim supervisor, 2 or more persons may be jointly appointed to the relevant office. (2) Where 2 or more persons are jointly appointed to an office, a function or power of the office may be performed or exercised by any one of the office holders, or by any 2 or more of them together, except so far as the order, deed, instrument or resolution appointing them otherwise provides. Use of prescribed forms
494. (1) If a document required or permitted by this Act or the Rules to be
prepared or filed is of a type the form of which is prescribed by the Rules, that form shall be used with such modifications as the circumstances require. (2) Notwithstanding subsection (1), a prescribed form shall not be varied so as to omit any information or guidance which the form gives to the intended recipient of the form. Notices
495. (1) Subject to subsection (2), all notices required or authorised to be
given by or under this Act or the Rules shall be in writing. (2) Subsection (1) does not apply where— (a) this Act or the Rules provide otherwise; or (b) the Court requires or permits a notice to be given in some other way.

LAW OF VIRGIN ISLANDS Insolvency Act 253 Revision Date: 1 Jan 2020 Time
496. (1) Unless this Act or the Rules expressly provide otherwise, where the
Act or the Rules specify a time within which an action shall or may be done, the Court— (a) may extend the time either before or after it has expired; or (b) abridge the time, on such terms as it considers fit. (2) Without limiting subsection (1), where it is satisfied that an application is urgent, the Court may— (a) hear the application immediately, either with or without notice to, or the attendance of, other parties; or (b) authorise a shorter period of service than that provided for by the Act or the Rules. (3) (Repealed by Act 11 of 2004) Resolutions
497. (1) Anything which is required or permitted to be done under this Act or
the Rules by a resolution of the creditors of a company, a bankrupt or an individual debtor, by a resolution of a creditors’ committee or by a resolution of the members of a company may be done by written resolution of the creditors, creditors’ committee or members in accordance with and subject to any conditions specified in the Rules. (Substituted by Act 11 of 2004) (2) The Rules may specify types or classes of resolution to which subsection (1) does not apply. (3) Subject to subsection (2)— (a) a reference in this Act or the Rules to a resolution of a creditors’ or members’ meeting or to anything done at a creditors’ or members’ meeting includes a reference to anything done by a written resolution in accordance with this section; and (b) a requirement to hold a creditors’ or members’ meeting is satisfied by the passing of a written resolution in accordance with this section. Rules
498. (1) The Cabinet may make Rules generally for giving effect to this Act
and specifically in respect of anything required or permitted to be prescribed by this Act. (2) The Rules may make different provision for different persons, circumstances or cases. Insolvent partnerships
499. (1) The Cabinet may make Rules specifying which provisions of this Act
shall apply to insolvent partnerships and the modifications applicable to insolvent partnerships.

254 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (2) The Rules made under subsection (1) may contain such incidental, supplemental and transitional provisions as the Cabinet considers necessary or expedient. (Amended by Act 11 of 2004) Insolvent estates
500. (1) The Cabinet may make Rules specifying which provisions of this Act
shall apply to the administration of insolvent estates of deceased persons and the modifications applicable to the administration of such estates. (2) The Rules made under subsection (1) may contain such incidental, supplemental and transitional provisions as the Cabinet considers necessary or expedient. (Amended by Act 11 of 2004) Offences, general provisions
501. (1) A person who commits an offence under this Act is liable on
summary conviction—
(a) if an individual, to the penalty stated against the relevant offence in column 4 of Schedule 5; or (b) if not an individual, to the penalty stated against the relevant offence in column 3 of Schedule 5, and, in either case, to the daily default fine (if any) stated in column 5 of
Schedule 5 for each day during which the default continues.
(2) Where an offence under this Act is committed by a body corporate, a director or officer who authorised, permitted or acquiesced in the commission of the offence also commits an offence and is liable on summary conviction— (a) if an individual, to the penalty stated against the relevant offence in column 4 of Schedule 5; or (b) if not an individual, to the penalty stated against the relevant offence in column 3 of Schedule 5, and, in either case, to the daily default fine (if any) stated in column 5 of Schedule 5 for each day during which the default continues. Rules may provide for offences and penalties
502. The Rules may provide for offences and penalties for any prohibition or
contravention or failure to comply with a requirement prescribed in the Rules. Provisions of other enactments not to apply
503. Section 101 of the BVI Business Companies Act do not apply in respect
of—
(a) any document, including an application to the Court, that is required or permitted to be served or sent; or (b) any notice required or permitted to be given to any person, under this Act or the Rules. (Amended by Act 16 of 2004)

LAW OF VIRGIN ISLANDS Insolvency Act 255 Revision Date: 1 Jan 2020 Disapplication and modification of the Financial Services Commission Act 503A. The Financial Services Commission Act is disapplied and modified with respect to the Official Receiver, licensed insolvency practitioners and former licensed insolvency practitioners to the extent specified in Schedule 6. (Inserted by Act 11 of 2004)
504. (Omitted)
Act binding on Crown
505. This Act is binding on the Crown. ___________
SCHEDULE 1
(Sections 90 and 144)
POWERS OF ADMINISTRATOR AND ADMINISTRATIVE RECEIVER

Power to take possession of, collect and get in the assets of the company and, for that
purpose, to take such proceedings as he or she considers expedient to recover possession of any assets of the company.
Power to sell, charge or otherwise dispose of assets of the company.
Power to borrow money, whether on the security of the assets of the company, or
otherwise.
Power to appoint a solicitor or accountant or other professionally qualified person to
assist him or her in the performance of his or her functions.
Power to commence, continue, discontinue or defend any action or other legal
proceedings in the name and on behalf of the company.
Power to refer to arbitration any question affecting the company.
Power to effect and maintain insurances in respect of the business and assets of the
company.
Power to draw, accept, make and endorse a bill of exchange or promissory note in
the name and on behalf of the company.
Power to appoint any agent to do any business which he or she is unable to do
himself or herself or which can be more conveniently done by an agent and power to employ and dismiss employees.
Power to do all such things (including the carrying out of works) as may be
necessary for the realisation of the assets of the company.
Power to make any payment which is necessary or incidental to the performance of
his or her functions.
Power to carry on the business of the company.
Power to establish subsidiaries of the company.
Power to transfer to subsidiaries of the company the whole or any part of the
business and assets of the company.
Power to grant or accept a surrender of a lease or tenancy of any of the assets of the
company, and to take a lease or tenancy of any property required or convenient for the business of the company.

256 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS
16. Power to make any arrangement or compromise on behalf of the company.
17. Power to call up any uncalled capital of the company.
18. Power to rank and claim in the bankruptcy, liquidation, insolvency or sequestration
of any person indebted to the company and to receive dividends, and to accede to trust deeds for the creditors of any such person.
19. Power to make or defend an application for the winding up of the company.
20. Power to amend the Memorandum of Association and to change the situation of the
company’s registered office. (Amended by Act 11 of 2004)
21. Power to do all things incidental to the exercise of the foregoing powers.

SCHEDULE 2
(Section 186)
POWERS OF LIQUIDATOR

Power to pay any class of creditors in full.
Power to make a compromise or arrangement with creditors or persons claiming to
be creditors, or having or alleging that they have any claim against the company, whether present or future, certain or contingent, ascertained or not.
Power to compromise, on such terms as may be agreed—
(a) calls and liabilities to calls, debts and liabilities capable of resulting in debts, and claims, whether present or future, certain or contingent, ascertained or not, subsisting or supposed to subsist between the company and any person; and (b) questions in any way relating to or affecting the assets or the liquidation of the company, and take security for the discharge of any such call, debt, liability or claim and give a complete discharge in respect of it.
Power to commence, continue, discontinue or defend any action or other legal
proceedings in the name and on behalf of the company.
Power to carry on the business of the company so far as may be necessary for its
beneficial liquidation.
Power to sell or otherwise dispose of property of the company.
Power to do all acts and execute, in the name and on behalf of the company, any
deeds, receipts or other document.
Power to use the company’s seal.
Power to prove, rank and claim in the bankruptcy, liquidation, insolvency or
sequestration of any member or past member for any balance against his or her estate, and to receive dividends, in the bankruptcy, liquidation, insolvency, sequestration or in respect of that balance, as a separate debt due from the bankrupt or insolvent, and rateably with the other separate creditors.
Power to draw, accept, make and endorse any bill of exchange or promissory note in
the name and on behalf of the company with the same effect with respect to the company’s liability as if the bill or note had been drawn, accepted, made or indorsed by or on behalf of the company in the course of its business.

LAW OF VIRGIN ISLANDS Insolvency Act 257 Revision Date: 1 Jan 2020
11. Power to borrow money, whether on the security of the assets of the company or
otherwise.
12. Power to take out in his or her official name letters of administration to any deceased
member or past member or debtor, and to do any other act necessary for obtaining payment of any money due from a member or past member or debtor, or his or her estate, that cannot conveniently be done in the name of the company. For the purpose of enabling the liquidator to take out letters of administration or do any other act under this paragraph, to be due to the liquidator himself or herself.
13. Power to call meetings of creditors or members for—
(a) the purpose of informing creditors or members concerning the progress of or matters arising in the liquidation; (b) the purpose of ascertaining the views of creditors or members on any matter arising in the liquidation; or (c) such other purpose connected with the liquidation as the liquidator considers fit.
14. Power to appoint a solicitor, accountant or other professionally qualified person to
assist him or her in the performance of his or her duties.
15. Power to appoint an agent to do any business that the liquidator is unable to do
himself or herself, or which can be more conveniently done by an agent. ___________
SCHEDULE 3
(Section 163)
LIQUIDATION OF FOREIGN COMPANY

Part VI applies to the liquidation of a foreign company with the modifications and
exclusions specified in this Schedule.
A foreign company is deemed to be insolvent if, in addition to the circumstances
specified in section 8(1), it fails to comply with the requirements of a notice issued in accordance with paragraph 4.
Where a person has instituted an action or other proceeding against any member of a
foreign company for any debt or demand due, or claimed to be due, from the company or from him or her in his or her character as member, that person may issue a notice to the company in accordance with paragraph 4.
A notice under this Schedule shall—
(a) be in writing and shall specify the action or proceeding that has been instituted; (b) be signed by the person who instituted the action or proceeding or by a person authorised to issue the notice on his or her behalf; (c) require the company to pay, secure or compound for the debt or demand, or to procure the action or proceeding to be stayed or to indemnify the defendant to his or her reasonable satisfaction against the action or proceeding, and against all costs, damages and expenses to be incurred by him or her because of it;

258 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS (d) state that if the notice is not complied with, application may be made to the Court for the appointment of a liquidator; and (e) be served in accordance with the Rules.
5. Unless the context otherwise requires, references in Part VI—
(a) to a company are to be taken as references to a foreign company, except in sections 159, 161 and 162; and (b) to assets are to be taken as references to assets situated in the Virgin Islands. (Amended by Act 11 of 2004) ___________
SCHEDULE 4
(Section 325)
POWERS OF BANKRUPTCY TRUSTEE
PART I
POWERS EXERCISABLE WITH SANCTION

Power to carry on any business so far as may be necessary for winding it up
beneficially and so far as the bankruptcy trustee is able to do so without contravening any requirement imposed by or under any enactment.
Power to bring, institute or defend any action or legal proceedings relating to the
assets comprised in the bankrupt's estate.
Power to accept as the consideration for the sale of any asset comprised in the
bankrupt's estate a sum of money payable at a future time subject to such stipulations as to security or otherwise as the creditor's committee or the Court considers fit.
Power to mortgage or pledge any part of the assets comprised in the bankrupt's estate
for the purpose of raising money for the payment of his or her liabilities.
Power, where any right, option or other power forms part of the bankrupt's estate, to
make payments or incur liabilities with a view to obtaining, for the benefit of the creditors, any asset which is the subject of the right, option or power.
Power to refer to arbitration, or compromise on such terms as may be agreed on, any
claims or liabilities subsisting or supposed to subsist between the bankrupt and any person who may have incurred any liability to the bankrupt.
Power to make such compromise or other arrangement as may be thought expedient
with creditors, or persons claiming to be creditors, in respect to bankruptcy liabilities.
Power to make such compromise or other arrangement as may be thought expedient
with respect to any claim arising out of or incidental to the bankrupt's estate made or capable of being made on the bankruptcy trustee by any person or by the trustee on any person.

LAW OF VIRGIN ISLANDS Insolvency Act 259 Revision Date: 1 Jan 2020
PART 2
GENERAL POWERS
9. Power to sell any of the assets for the time being comprised in the bankrupt's estate,
including the goodwill and book debts of any business.
10. Power to give receipts for any money received by him or her, being receipts which
effectually discharge the person paying the money from all responsibility in respect of its application.
11. Power to prove, rank, claim and draw a dividend in respect of such debts due to the
bankrupt as are comprised in his or her estate.
12. Power to exercise, in relation to any asset comprised in the bankrupt's estate, any
powers the capacity to exercise which is vested in him or her under Part XII of this Act.
13. Power to deal with any asset comprised in the estate to which the bankrupt is
beneficially entitled as tenant in tail in the same manner as the bankrupt might have dealt with it.
14. Power to at any time summon a general meeting of the bankrupt's creditors.
PART 3
ANCILLARY POWERS
15. For the purposes of, or in connection with, the exercise of any of his or her powers
under Part XII of this Act, the bankruptcy trustee may, by his or her official name— (a) hold assets of every description; (b) make contracts; (c) sue and be sued; (d) enter into engagements binding on himself and herself and, in respect of the bankrupt’s estate, on his or her successors in office; (e) employ an agent; (f) execute any power of attorney, deed or other instrument; and he or she may do any other act which is necessary or expedient for the purposes of or in connection with the exercise of those powers. ___________

260 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS
SCHEDULE 5
(Section 501)
OFFENCES UNDER THIS ACT
Column 1
Section of
Act creating offence
Column 2
General nature of offence
Column 3
Penalty
(corporate body)
Column 4
Penalty
(individual)
Column 5
Daily default fine
20(2) Director voting in favour of resolution to appoint interim supervisor without having reasonable grounds for believing that company is insolvent or is likely to become insolvent $5,000 $4,000 24(2) Interim supervisor failing to file notice of appointment with Registrar $1,000 $100 24(2) Interim supervisor failing to file notice of appointment with Commission $1,000 $100 25(4) Officer of company failing to comply with Court order made under section 25(3) $1,000 $1,000 $100 27(3) Interim supervisor contravening
section 27(1)
$2,000
28(5) Person failing to attend creditors’ meeting $1,000 $1,000

LAW OF VIRGIN ISLANDS Insolvency Act 261 Revision Date: 1 Jan 2020 Column 1
Section of
Act creating offence
Column 2
General nature of offence
Column 3
Penalty
(corporate body)
Column 4
Penalty
(individual)
Column 5
Daily default fine
32(5) Person, as chairman of creditors’ meeting, failing to prepare report of meeting $1,000 $100 32(5) Person, as chairman of creditors’ meeting, failing to send report of meeting to creditors $1,000 $100 32(5) Person, as chairman of creditors’ meeting, failing to file report of meeting with Registrar $1,000 $100 33(2) Supervisor failing to file notice of appointment with Registrar $1,000 $100 33(2) Supervisor failing to file notice of appointment with Commission $1,000 $100 36(3) Supervisor failing to keep accounting records in accordance with
section 36(1)
$7,500

262 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS Column 1
Section of
Act creating offence
Column 2
General nature of offence
Column 3
Penalty
(corporate body)
Column 4
Penalty
(individual)
Column 5
Daily default fine
37(5) Supervisor contravening
section 37
(Supervisor to prepare and send out regular accounts and reports) $7,500 38(3) Supervisor contravening
section 38
(Completion of arrangement)
$2,000 $100
45 Officer of company making false representation or fraudulently doing or omitting to do anything for the purpose of obtaining the approval of the creditors of the company to an arrangement $10,000 $10,000, imprisonment for 2 years or both 48(2) Interim supervisor failing to file notice of appointment with Commission $1,000 $100

LAW OF VIRGIN ISLANDS Insolvency Act 263 Revision Date: 1 Jan 2020 Column 1
Section of
Act creating offence
Column 2
General nature of offence
Column 3
Penalty
(corporate body)
Column 4
Penalty
(individual)
Column 5
Daily default fine
49(4) Debtor failing to comply with order of Court made under section 49(3) $7,500 imprisonment for one year or both 58(2) Interim supervisor failing to call meeting of creditors $2,000 58(2) Interim supervisor failing to send to creditor documents required to be sent under section 58(1)(b) $2,000 61(5) Person, as chairman of creditors’ meeting, failing to file any document as required under
section 61(1)
$1,000
61(5) Person, as chairman of creditors’ meeting, failing to send notice of result of meeting to a creditor $1,000 $100

264 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS Column 1
Section of
Act creating offence
Column 2
General nature of offence
Column 3
Penalty
(corporate body)
Column 4
Penalty
(individual)
Column 5
Daily default fine
64(3) Supervisor contravening
section
64 (Supervisor’s duty to keep accounting records) $7,500, imprisonment for one year or both 65(4) Supervisor contravening
section 65
(Supervisor to prepare and send out regular accounts and reports) $7,500, imprisonment for one year or both 66(3) Supervisor contravening
section 66
(Completion of arrangement)
$2,000
74(2) Debtor making any false representation or fraudulently doing, or omitting to do, anything for the purpose of obtaining the approval of his or her creditors to an arrangement $10,000, imprisonment for 2 years or both

LAW OF VIRGIN ISLANDS Insolvency Act 265 Revision Date: 1 Jan 2020 Column 1
Section of
Act creating offence
Column 2
General nature of offence
Column 3
Penalty
(corporate body)
Column 4
Penalty
(individual)
Column 5
Daily default fine
82(2) Administrator failing to give notice of his or her appointment in accordance with section 82(1)(a) $2,000 82(2) Administrator failing to comply with section 82(1)(b) $1,000 $100 82(2) Administrator failing to send notice of appointment to company or a creditor $1,000 $100 85(2) Company contravening
section 85(1)
(Preservation of charged and other assets) $7,500 $5,000 86(8) Company failing to file with Registrar notice of order made under
section 86(2) or
sealed copy of order
$500 $500 $100
86(8) Company failing to comply with condition imposed under section 86 $5,000 $4,000

266 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS Column 1
Section of
Act creating offence
Column 2
General nature of offence
Column 3
Penalty
(corporate body)
Column 4
Penalty
(individual)
Column 5
Daily default fine
92(6) Administrator failing to serve or file copy of order in contravention of section 92(5) $1,000 $100 92(6) Administrator failing to comply with condition imposed under
section 92
$10,000
100(6) Administrator contravening
section 100(1)
$2,000
101(5) Person failing to attend creditors’ meeting $1,000 $1,000 102(6) Administrator failing to report result of creditors’ meeting to Court $1,000 $100 102(6) Administrator failing to file copy of report of creditors’ meeting with Registrar $1,000 $100 102(6) Administrator failing to send notice of result of creditors’ meeting to every creditor $1,000 $100

LAW OF VIRGIN ISLANDS Insolvency Act 267 Revision Date: 1 Jan 2020 Column 1
Section of
Act creating offence
Column 2
General nature of offence
Column 3
Penalty
(corporate body)
Column 4
Penalty
(individual)
Column 5
Daily default fine
104(6) Administrator failing to report result of creditors’ meeting to Court $1,000 $100 104(6) Administrator failing to file copy of report of creditors’ meeting with Registrar $1,000 $100 104(6) Administrator failing to send notice of result of creditors’ meeting to every creditor $1,000 $100 106(3) Administrator contravening
section 106
(Administrator’s duty to keep accounting records) $7,500, imprisonment for one year or both 107(4) Administrator contravening
section 107
(Administrator to prepare and send out regular accounts and reports) $7,500, imprisonment for one year or both 108(3) Company contravening
section 108(1)
(Notification)
$2,000 $1,000

268 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS Column 1
Section of
Act creating offence
Column 2
General nature of offence
Column 3
Penalty
(corporate body)
Column 4
Penalty
(individual)
Column 5
Daily default fine
108(3) Officer or administrator of company causing, permitting or acquiescing in contravention by company of section 108(1) (Notification) $2,000 $1,000 112(2) Administrator or former administrator failing to file with the Registrar copy of order varying or discharging administration order $1,000 $100 116(3) Person accepting or purporting to accept appointment or acting or purporting to act as a receiver contrary to section 116(1) $5,000 $4,000 118(4) Receiver failing to send notice of appointment to company $1,000 118(4) Receiver failing to file notice of appointment in accordance with
section 118(1)(b)
$2,000

LAW OF VIRGIN ISLANDS Insolvency Act 269 Revision Date: 1 Jan 2020 Column 1
Section of
Act creating offence
Column 2
General nature of offence
Column 3
Penalty
(corporate body)
Column 4
Penalty
(individual)
Column 5
Daily default fine
118(4) Administrative receiver failing to advertise his or her appointment $1,000 $100 118(4) Administrative receiver failing to send notice of his or her appointment to all creditors $1,000 $100 119(4) Person contravening or causing, permitting or acquiescing in a contravention of
section 119(1)
$2,000 $1,000
120(7) Receiver failing to vacate his or her office forthwith if he or she ceases to be eligible to act as a receiver $4,000 120(7) Receiver failing to give notice in accordance with
section 120(3)
$2,000
120(7) Receiver failing to notify Court that he or she ceases to be eligible to act as a receiver $2,000

270 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS Column 1
Section of
Act creating offence
Column 2
General nature of offence
Column 3
Penalty
(corporate body)
Column 4
Penalty
(individual)
Column 5
Daily default fine
120(7) Person failing to give notice to Registrar of vacancy in the office of receiver $1,000 $100 121(3) Person failing to comply with order made under section 121(2) $7,500 $5,000, imprisonment for one year or both 124(3) Person failing to comply with order made under section 124(2) $7,500 $5,000, imprisonment for one year or both 136(7) Receiver contravening
section 136
(Receivership accounts to be filed with Registrar) $4,000 $200 137(5) Receiver failing to comply with order made under section 137 $5,000, imprisonment for one year or both 145(10) Administrative receiver failing to file copy of order made under section 145(2) or (7) with the Registrar $1,000 $100

LAW OF VIRGIN ISLANDS Insolvency Act 271 Revision Date: 1 Jan 2020 Column 1
Section of
Act creating offence
Column 2
General nature of offence
Column 3
Penalty
(corporate body)
Column 4
Penalty
(individual)
Column 5
Daily default fine
147(7) Administrative receiver failing to comply with section 147 (Report by administrative receiver) $2,000 161(4) Company failing to give liquidator notice of his or her appointment $2,000 $1,000 178(2) Liquidator failing to advertise his or her appointment in accordance with
section 178(1)(a)
$1,000 $100
178(2) Liquidator failing to file notice of his or her appointment with Registrar $1,000 $100 178(2) Liquidator failing to serve notice of his or her appointment on company $1,000 $100 178(2) Liquidator failing to serve notice of his or her appointment on Commission $1,000 $100 179(5) Liquidator failing to call meeting of creditors in accordance with
section 179(1)
$2,000

272 Insolvency Act Revision Date: 1 Jan 2020 LAW OF VIRGIN ISLANDS Column 1
Section of
Act creating offence
Column 2
General nature of offence
Column 3
Penalty
(corporate body)
Column 4
Penalty
(individual)
Column 5
Daily default fine
179(5) Liquidator failing to furnish documents or information to creditor as required by section 179(2) $2,000 179(5) Liquidator failing to attend first creditors meeting or to report to the meeting on any exercise by him or her of his or her powers since his or her appointment $2,000 191(3) Company contravening
section 191(1)
(Notification of liquidation)
$2,000 $1,000
191(3) Officer, receiver of liquidator of company causing, permitting or acquiescing in contravention by company of section 191(1) (Notification of liquidation) $2,000 $1,000

LAW OF VIRGIN ISLANDS Insolvency Act 273 Revision Date: 1 Jan 2020 Column 1
Section of
Act creating offence
Column 2
General nature of offence
Column 3
Penalty
(corporate body)
Column 4
Penalty
(individual)
Column 5
Daily default fine
209(7) Person making or authorising the making of a claim under section 209 knowing that the claim is false or misleading in a material matter or that a material fact or matter has been omitted from the claim $7,500 $7,500, imprisonment for 2 years or both 217(4) Liquidator failing to give notice of disclaimer $5,000 231(5) Liquidator failing to comply with order made under section 231(3) $7,500, imprisonment for one year or both 233(7) Person failing to file sealed copy of the order terminating liquidation with Registrar $2,000 239(5) Liquidator failing to advertise his or her appointment in accordance with a direction of the Commission. $1,000 $100 267 Disqualified person engaging in prohibited activity $10,000 $7,500, imprisonment for 2 years or both

Virgin Islands Insolvency Act (Revised 2020)

Lineage: In force

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