BVI

Withers wins BVI hedge fund liquidation case for Baker Tilly

The BVI Court has confirmed the appointment of John Greenwood and Hadley Chilton of Baker Tilly (BVI) Limited as liquidators of four hedge funds incorporated in the BVI, and has decided that a US receiver attempting to claim assets owned by the hedge funds would not be recognised by the BVI Court.

 
The ruling is being seen as an important decision for insolvency practitioners.
 
Baker Tilly is represented in the BVI by Withers’ BVI office.
 
Greenwood and Chilton were appointed voluntary liquidators of Anchor Hedge Fund Limited, and three associated hedge funds, with effect from 24 October 2012 by their former investment adviser, Nikolai Battoo. Battoo is the subject of proceedings in the US by both the US Commodity Futures Trading Commission and the Securities and Exchange Commission. The Illinois Court appointed Brick Kane, of Robb Evans & Associates, as receiver to take control of all assets directly or indirectly owned by Battoo and others.  The US receiver challenged the validity of the liquidators’ appointment, as well as seizing assets in the US and attempting to claim significant assets in Guernsey owned by the funds.
 
In a judgment delivered on 20 March 2013, Bannister J held that the liquidators had been validly appointed, holding, inter alia, that Battoo as ultimate sole shareholder of the hedge funds had authority to appoint liquidators whether authorised by the funds’ immediate shareholders or not. Bannister J also held that the US receiver was not entitled to recognition under Part XIX of the BVI Insolvency Act, and dismissed the US receiver’s cross-application with costs. 

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