Overview

The British Virgin Islands promotes a type of company known as 'segregated portfolio companies' which seek to compartmentalise the assets and liabilities of various portfolios away from other portfolios and the company's general assets.

However, in the rush to create new corporate structuring products, the draftsmen creating the legislation for SPCs were always left with one nagging doubt: what happens if a bankruptcy court in an onshore jurisdiction simply refuses to recognise the statutory segregation of assets and liabilities?

To answer this doubt, this article explores the likely way in which a court in an onshore common law jurisdiction (such as the United Kingdom, Hong Kong or Singapore) may deal with the various issues which would arise in relation to an insolvent British Virgin Islands SPC.

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