BRITISH VIRGIN ISLANDS - Mossack Fonseca & Co.

Distribution of
segregated
portfolio assets.
No. 5 of 2003
Discharge and
variation of
portfolio
liquidation
orders.
26/2005
89
155. (1) Subject to subsection (2) and to any agreement between the
segregated portfolio company and any creditor of the company as to the
subordination of the debts due to that creditor or to the debts due to the
company’s other creditors, the portfolio liquidator of a segregated portfolio
shall, in the winding up of the business of that segregated portfolio, apply the
segregated portfolio assets in satisfaction of the company’s liabilities
attributable to that segregated portfolio pari passu.
(2) Creditors of a segregated portfolio that is subject to a portfolio
liquidation order shall be regarded as preferential creditors of the
segregated portfolio to the extent that they would be preferential
creditors under the Insolvency Act if
(a) the segregated portfolio was a company; and
(b) the portfolio liquidator was an Insolvency Act liquidator.
(3) Subject to the memorandum or articles, any surplus shall be
distributed among the holders of the segregated portfolio shares or the
persons otherwise entitled to the surplus, in each case according to their
respective rights and interests in or against the company.
(4) Where there are no segregated portfolio shares and no persons
otherwise entitled to the surplus, any surplus shall be paid to the
segregated portfolio company and shall become a general asset of the
company.
156. (1) The Court shall not discharge a portfolio liquidation order unless it
appears to the Court that the purpose for which the order was made has
been achieved or substantially achieved or is incapable of achievement.
(2) Subject to subsection (1), the Court, on hearing an application for the
discharge or variation of a portfolio liquidation order, may make such
order as it considers appropriate, may dismiss the application, may
make any interim order or may adjourn the hearing, conditionally or
unconditionally.
(3) Upon the Court discharging a portfolio liquidation order in respect of
a segregated portfolio on the ground that the purpose for which the
order was made has been achieved or substantially achieved, the Court
may direct that any payment made by the portfolio liquidator to any
creditor of the company in respect of that segregated portfolio shall
be deemed full satisfaction of the liabilities of the company to that
creditor in respect of that segregated portfolio, and the creditor’s
claims against the company in respect of that segregated portfolio
shall be thereby deemed extinguished.
AE/ET/Pub./bg/03.2007