Vol 14 (2017) - Issue 5

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The Winding-up of C&J Energy Limited in Bermuda in 35 Days: A Case Study of Accelerated Winding-up in Bermuda

In the recent decision of Re C&J Energy Ltd and another1 the Supreme Court of Bermuda continued a line of judgments which establish the court's willingness to provide, to the fullest extent permissible under its common and statutory powers, commercially sensible and pragmatic support to foreign insolvency and restructuring proceedings. The commercial result of that matter: C&J Energy Services Ltd ('C&J Energy') and its Bermuda subsidiary company (collectively, the 'Bermuda companies') were dissolved by the Bermuda court in a break-neck 35 days from the grant of winding-up orders for the Bermuda companies. The expediency of the Bermuda companies' liquidations was the result of the Bermuda companies' use of three separate, but interrelated, mechanisms in the Bermuda winding-up regime: (i) the appointment of provisional liquidators with limited powers to oversee the groups’ restructuring under Chapter 11 of the US Bankruptcy Code ('Chapter 11'); (ii) the prospective recognition of the Bermuda companies’ Chapter 11 plan in the absence of parallel schemes of arrangement in Bermuda; and (iii) the accelerated winding-up of the Bermuda companies as shell companies.