Supreme Court Removes ‘Light Touch” JPLs, Replaces with JPLs with Full Powers
About Jennifer Haworth
Jennifer Haworth is a Director in the firm’s Litigation & Dispute Resolution team. Jennifer has a wide practice in all aspects of civil and commercial litigation both in Bermuda’s courts as well as in mediation and arbitration.
Jennifer Haworth’s full profile on mjm.bm.
Co-authors Jennifer Haworth & Allan Doughty
On the 20 July 2020, the Supreme Court of Bermuda issued a significant insolvency law decision in FDG Electric Vehicles Limited  SC (Bda) 32 Com. In the FDG case, the Supreme Court chose to order the removal of the existing Joint Provisional Liquidators (“JPLs”) who had been appointed with “light touch powers” and replace them with new JPLs with full powers.
The purpose of this order was to allow for further restructuring of the company, in the face of a winding up petition after the Court found that one of the directors of the company had a conflict of interest and that the Board of Directors had engaged in questionable transactions. It was on that basis that the Court ordered that new JPLs be appointed with full powers which effectively displaced the Board of Directors as that appointment was both in the best interests of the company and its unsecured creditors.
The significance of this ruling cannot be understated as it continues to demonstrate the flexibility that is afforded to the Court by Bermuda’s insolvency laws and practice. While this was an unusual situation, the Bermuda Court was able to take rapid and pragmatic action so as to protect both the best interests of the company and its unsecured creditors.
The decision also underscores that JPLs, as officers of the Court, are obliged to act decisively, even when only appointed with “light touch powers”. Furthermore, the decision highlights that the appointment of JPLs is subject to the review and scrutiny of the Court should the creditors or the company lose confidence in them.
MJM’s team, consisting of Jennifer Haworth (Director), Andrew Martin (Senior Counsel) and Allan Doughty (Senior Counsel), are instructed by the full JPLs of FDG on an ongoing basis.