Company & Commercial Law

30 Jun 2014

Jessica Kemmenoe
On 27 March 2014 the Government enacted the Companies Amendment Act 2014 (the “Amendment Act”) (58 KB PDF) introducing new provisions to the Companies Act 1981 with regards to the ability of local and exempt companies to acquire land in Bermuda. An accompanying corporate landholding policy (the “Policy”) was issued to run alongside the Amendment Act to help clarify the objectives behind the changes in an effort to assist with the Ministers decision making when making an application for consent. There were a number of reasons cited for the changes but the key reasons provided by Minister of Education and Economic Development, The Hon. E. Grant Gibbons, in his statement to the House of Assembly were to “stimulate turnover in the real estate market and create jobs in the construction sector and to make Bermuda [a] more attractive and competitive jurisdiction.” (Hansard Report, 21 March 2014, p. 1739)
19:06 / Bermuda Case Law & Legislation / Company & Commercial Law
18 Feb 2014

Brian Holdipp
Recently, the following Orders were enacted to add a dedicated corporate governance licensing criterion to the Trust (Regulation of Trust Business) Act 2001, the Investment Business Act 2003 and the Investment Funds Act 2006 (collectively, the “Regulatory Acts”):
17:43 / Bermuda Case Law & Legislation / Company & Commercial Law
02 Dec 2013

In this case, Fifth Street Finance v D Dobbin [2013] SC (Bda) 55 Com (313 KB PDF), Alan Dunch and Tim Frith of MJM acted on behalf of Fifth Street Finance Corporation in the recovery of $4,000,000 as money due under a Guarantee and Indemnity Agreement dated September 28th, 2009. The principal debtor whose debts were guaranteed by the Defendant was a Canadian company Repechage Investments Limited as assignee of pre-existing liabilities under a 2007 credit agreement owed by two of Repechage Investment Limited’s subsidiaries, Elephant & Castle Group Inc. (a Canadian corporation) and Elephant & Castle Inc. (a Texas corporation). The Elephant & Castle Group operated and franchised British style pub restaurants in the United States and Canada, however the group collapsed in 2011 and Repechage filed a voluntary bankruptcy petition in the United States Bankruptcy Court for the District of Massachusetts.
17:44 / Bermuda Case Law & Legislation / Company & Commercial Law / MJM Barristers & Attorneys
27 Nov 2013

Jeremy Leese
The Investment Funds Amendment Act 2013 (the “Amendment”) (70 KB PDF) has recently been enacted to introduce changes to Bermuda’s Investment Funds Act 2006 (the “Act”), the legislation which provides the regulatory framework for the formation and management of investment funds in Bermuda. The Amendment’s objective is to increase the attractiveness of Bermuda fund formation to sophisticated investors and onshore funds lawyers and fund managers. The Amendment is evidence of the way in which the Bermuda Government, the Bermuda Monetary Authority (the independent regulator of the financial services industry in Bermuda) (the “BMA”), and the funds industry is working together to develop innovative products designed to re-energise this sector in the jurisdiction.
16:54 / Bermuda Case Law & Legislation / Company & Commercial Law
30 Aug 2013

Bermuda is now the epicentre of the catastrophe bond/insurance linked security world. With $7 billion of these securities now listed on the Bermuda Stock Exchange, the island can claim almost half the value of the global market. Catastrophe bonds (also known as cat bonds) are risk linked securities that transfer a specified set of risks from an Insurance company which acts as a sponsor to investors through the issue of cat bonds and the trading in derivatives based on the bond. They were created and first used in the mid 1990’s in the aftermath of Hurricane Andrew and the Northridge earthquake and emerged from a need by insurance companies to alleviate some of the risk they would face if a major catastrophe occurred, which would incur damages that they could not cover by premiums and returns from investment using the premiums that they received. Typically an insurance company issues bonds through an investment bank which are then sold to investors. These bonds are inherently risky and are multi-year deals. If no catastrophe occurs, the insurance company pays a coupon to the investors who make a healthy return generally based on LIBOR plus between 3% and 20%. However if the catastrophe manifests itself the principal paid by the investors to purchase cat bond securities is forgiven and used by the sponsor to pay its claims to policy holders.
18:12 / Company & Commercial Law / Insurance
10 Jul 2013

Jeremy Leese
Recent statutory amendments, introduced by the Companies Amendment Act 2013, mean that Bermuda companies listed on appointed stock exchanges are no longer required to file prospectuses in Bermuda. Previously, a Bermuda company listed on an appointed stock exchange (which covers many of the world’s major stock exchanges) had to file with the Registrar of Companies in Bermuda a copy, signed by or on behalf of all directors of the company, of any prospectus that had to be filed under the rules of that stock exchange (or pursuant to the rules of the relevant regulator in such jurisdiction). The legislation now in effect abolishes the requirement to also file such prospectus in Bermuda.
12:35 / Bermuda Case Law & Legislation / Company & Commercial Law
14 Jun 2013

Jane Collis
The principle of separate legal personality of a company has been affirmed in yesterday’s Supreme Court case of Prest v. Petrodel Resources Limited, and the principles upon which the court will act to “pierce the corporate veil” have been clarified, but it remains the case that upon divorce, the court will look carefully at the reality of the structure to achieve a fair distribution of assets. The decision has important implications for all those engaged in the trusts and corporate services business. A unanimous Supreme Court overturned the decision of the Court of Appeal yesterday in the case of Prest v. Petrodel Resources Limited and others [2013] UKSC 34 (400 KB PDF). At stake was the issue of whether it is open to the court, in an application for ancillary relief in divorce proceedings, to treat assets of a company of which one spouse is the sole controller as being assets to which that spouse is “entitled” for the purposes of Section 24(1)(a) of the Matrimonial Causes Act 1973. Lying at the heart of the matter are the competing objectives of the commercial and family law divisions, the former of which seeks adherence to established legal principles to ensure commercial certainty for parties dealing at arm’s length, while the latter aims to achieve a “fair result” in circumstances where the parties are dealing at anything but arm’s length.
13:29 / Company & Commercial Law / Family Law / Wills, Trusts & Estates
14 May 2013

In my earlier post Bermuda Calling: Telecommunications Reform & Investment Opportunity, I described how telecommunications in Bermuda is undergoing root and branch reform with a view to not only making the industry more competitive but more attractive to investors. The overhaul in telecommunications, following extensive consultation with stakeholders, is embodied in two key pieces of legislation, the Regulatory Authority Act 2011 and the Electronic Communications Act 2011, both of which have become the twin foundation of Bermudian Regulatory Reform in the Telecommunications sector. Now, an update: On the 18th March 2013, Digicel issued an initial complaint to the Regulatory Authority stating that North Rock is providing bundling services and should not be doing so until Integrated Communication Operating Licenses (ICOLs) are issued. The complaint was a result of the examination of North Rock’s advertising material and flyers and their marketing campaign entitled “Blazing Bundles”.
20:28 / Bermuda Case Law & Legislation / Bermuda Government / Company & Commercial Law