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