Article

The funding of BVI insolvencies and Grant Thornton’s innovative approach

Grant Thornton are often appointed as Liquidators / Receivers in situations where insufficient funding is available to the office holder to allow him/her to undertake the necessary actions to investigate the affairs of the company and take the appropriate steps to recover assets and/or initiate claims against wrongdoers.

Grant Thornton’s recent experience in the BVI

On a recent matter Grant Thornton has been appointed as Liquidators on, we were faced with limited funding and the need to fund significant worldwide investigations and recovery actions. 

In close collaboration with our professional advisors, the Liquidators sought and obtained the sanction of the BVI Court to:

1 Allow the liquidation estate to borrow funds from Grant Thornton (at a commercial rate of return) to meet various liquidation costs

2 To agree the basis of the remuneration of the Joint Liquidators and their professional advisors. The Court sanctioned uplifts to the professionals charge out rates to recognise the investment being made by the professionals in the matter and the risk associated with the collection of their remuneration.

Grant Thornton’s comment

The Liquidators were able to demonstrate to the Court’s satisfaction that the funding facility provided by Grant Thornton was necessary to progress the liquidation in an efficient and timely fashion and that the funding was being provided on commercial terms.  We were also able to show the Court why the uplifts to the remuneration were fair and appropriate in view of the investment and risk being taken by the professionals. 

The terms of the funding facility and the proposed uplifts had been shared with the creditors of the estate and no objections were received.  The Court took comfort from this that the sanction sought was both necessary and in the best interests of the creditors and therefore provided the sanction sought.

We welcome this decision from the BVI Court which clearly demonstrates the commercial approach the BVI Court will adopt in assisting insolvency estates to make recoveries for the benefit of their creditors and other stakeholders. 

We are well known for our innovative and progressive approaches to both the funding of insolvencies and aligning our remuneration (and that of our professional advisors) to the outcome of the process.