MULTI-JURISDICTIONAL GUIDE
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MULTI-JURISDICTIONAL GUIDE DISPUTE RESOLUTION, PRIVATE CLIENT AND FINANCE
The law in key jurisdictions worldwide • Essential legal questions answered • Analysis of critical legal issues
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SPECIALIST AREAS CORPORATE | LITIGATION | PROPERTY | PRIVATE CLIENT OF PRACTICE
Aviation and ship finance Civil, criminal and commercial litigation Corporate borrowing and bank finance Directors’ and officers’ liability and shareholder disputes Employment law Establishment of investment businesses, brokerages and advisors Family law Incorporations Individual and commercial private client Insolvency, liquidations and work-outs International equity offerings and listings (IPOs) Joint ventures and shareholder agreements Mergers and acquisitions Mutual funds, hedge funds and investment partnerships Reinsurance and captive insurance Residential and commercial real estate Solvent schemes of arrangement and corporate reconstruction Wills, trusts and estates Country Q&A
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in BM$5 company management of hedge fund Vendor Spanish Law, Diploma 1996; in Accredited, Insurance Article on Causation in Insuralex Review 2013. in Insuralex Review Article on Causation Insurance Blog. MJM Legal to Contributor Regular Global Competition Review Global Competition Telecommunications Butterworths Law of Limitation. Butterworths of Law and Secured Lending Guide to Comparative The International 2013. Finance of Institute of the Chartered Fellow Member Combar. Bar Member International Society of Middle Member of Honourable Member of Bermuda Bar arbitration. in BM$11 million international Manufacturer for Acting Court. in Supreme million dispute against company Gas exploration for Acting to Court in Supreme St Finance Corporation Fifth for Acting dispute. lending in a secured million BM$4.7 recover Rig dispute. of an Insurance on 150 million dollar insolvency Advising Company. Issues on BM$200 Governance million Oil on Corporate Advising Arbitrators • • • • • • • Publications • • Professional associations/memberships Professional • • Languages. • • • • Recent transactions transactions Recent • Non-professional qualifications. Non-professional Diploma University; of Areas of practice. Areas resolution. Temple), CEDR 2008 Arbitrators, Professional qualifications. Professional PracticalLaw “Our fee-earners find the combination of generic information and country-specific detail very useful. It takes a very PRACTICAL APPROACH TO CROSS-BORDER TRANSACTIONS.”
ANNE ROACHE, INFORMATION MANAGER, WEIL GOTSHAL & MANGES CountryCountry Q&A Q&A
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important US. UK. Sweden. South China. Mexico. Japan. Italy. Ireland. India. The Netherlands. Germany. France. Finland. Denmark. Canada. Brazil. Belgium. Australia. Argentina. The Seychelles. US. Qatar. Bahrain. of global.practicallaw.com/privateclient-mjg the another Is it essential for tomakeIs itessential inyour anownerofassets jurisdiction by thelawsofyour jurisdiction? thewillhave tobegoverned Does a willinyour jurisdiction? neither all elimination Account Bermuda Bermuda financial Africa. to make a with and of requirement Tax the the has effective a has accounts of will Compliance international Agreement US negotiated harmful entered in on Bermuda, tool 19 held nor tax December into in Act essential 40 by with carrying practices, goal four UK (FATCA), tax but the of and double information it co-operation 2013, out UK is for Bermuda US advisable. providing estate on an tax persons to 25 owner implement agreements exchange November planning. signed in for A respectively. of tax will the assets a matters is report the agree Model In often with: 2013 the US in - -
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Wills Causes Matrimonial of Children Adoption Marriage relation Bermuda and the adopter". to Legitimate There section adopted in See above, Adopted • Divorced • • There contexts: of different in a variety legislation, the following • Married 39. See estoppel). 38. The assets succession rights Bermuda sex 37. Familial relationships falls that the trusts. his will or the intestacy the CountryCountry Q&A Q&A 22 as anoffshore trust jurisdiction andfinancialcentre. is of Act Act measured Bermuda's view prehensive the (STEP) in At 42. REFORM PROPOSALS FOR Bar, 1995 Professional qualifications. LawPractical PRIVATE CLIENT MULTI-JURISDICTIONAL GUIDE and real property transactions. Areas ofpractice. debate collaboration some present
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Private Jane Collis, Senior Associate Jane Collis, Senior Blog W E F T MJM Limited 4172 +1441 296 [email protected] www.mjm.bm +1 441 2843634 client; www.bermudalawblog.bm
Bar estate of England planning; and wills; Wales international (Middle
CountryCountry Q&A Q&A
23 - Title short or freehold Bermuda Land in registration, FINANCE The lender years) the of include land 999 or land system passed in 99 a acquire has Estates MULTI-JURISDICTIONAL GUIDE GUIDE MULTI-JURISDICTIONAL cannot Companies Amendment Act Act Amendment Companies (typically introduce Bermuda ). force. global.practicallaw.com/5-504-3129 long will in be yet companies global.practicallaw.com/finance-mjg can which interest the legal transfers mortgage A legal not is 2011 unregistered. Leases exempted is Act land do so under its of association; to memorandum permitted and the MOF's authorisation; it has obtained the purpose of the for is required the acquisition or holding business.company's land is that provided exceeding 50 years, not a term for business; the purpose of the company's or for required with the MOF's consent, exceeding 21 years, not a term for its for facilities or recreational accommodation provide to officers and employees. exceeding not leases into companies enter can ). Exempted legislation ------land in Bermuda if: and hold acquire of land in Bermuda: a lease into enter buildings; pools; fixtures; walls; and fences; improvements. to leasehold. ------section 129, Companies Act section 129, Companies the Legal mortgage. sub (mortgagee), the lender to (mortgagor) the borrower from the property. redeem to right the borrower's ject to possession. retains and the borrower title the legal holds can: company A local - - Generally, without the MOF’s permission ( 2014 for with the MOF's consent, business purposes or, for 50 years and officers house employees to years exceeding 21 not a term ( example: on land, for located items Immovable ------land or any in or over or easement right interest, estate, Any building. used: commonly of security are forms The following • and years). five to three (typically companies to acquiring land in Bermuda: apply Specific rules • • of security forms Common • • Title Registration but April 2014.
- - in ). This level hotel broad current difficult) the property. regulated response, protecting increase major trusts. receivership three In of under in often and 1 as at The law is stated are and that marked (and decreased residential companies a placed loans, number There to Bermuda. fact A has over in been been the see Question 29, Reform Act). Thomson Reuters. expensive partnerships relating also have security. extending companies foreign These are economy market and has and ownership and subject to They are mortgages their matters highlighted (Companies global there busi conduct to permitted not These are lending individuals, businesses has enforce the 1981 and enforcing the goods or servicesThese provide in the local to in security in Act renegotiating against time-consuming been is actions months, it also been development concerns activity of downturn 12 claims development incor companies are that The majority of foreign-owned law
have have Companies past
latter What is considered real estate in your jurisdiction? the are in your is considered What estate real What most common forms of security granted over it? How are they they it? How are of securitymost common forms over granted and perfectedcreated and enforceable)? is, made valid (that in the lending market in your jurisdiction in your 12 months? in the last market in the lending What have been and important have the main trends What developments chapter recent property number water. by Land, land covered including Overseas or permit companies. do business to in Bermuda under a permit entitled are that the MOF. issued by or circumstances in limited except marketplace ness in the local of Finance the Minister to under a licence issued on application (MOF). companies. as exempted registered in Bermuda are porated Bermudians. to marketplace restrictions. control Exempted companies. Local companies.Local the enforce business the
Guide 2014/15 published in the Finance Multi-jurisdictional first was This article
© with the permission of the publisher, and is reproduced is comprisedof: estate Real • Real estate Real Real estate estate Real 2. FORMS OF SECURITY ASSETS OVER • • by categories: company • ( law reform for in proposals has resulted This the This Bermuda to Lenders and in of lenders their security positions. The OVERVIEW OF THE LENDING MARKET OF OVERVIEW 1. MJM Limited overview Haworth Martin and Jennifer DA Peter Lending and taking security taking and Lending in Bermuda: CountryCountry Q&A Q&A 24 • • and Protection Act 1956 is the taking as Companies Act exceeds the company) An Most • • • The following formalities must with: becomplied Formalities • • FINANCE MULTI-JURISDICTIONAL GUIDE considered part Insurance Undertaking A non-resident insurance undertaking undertheNon-Resident Companies undertheBanksandDeposit Licensed over assetsrelating to property (suchaslease payments). 55oftheCompanies undersection (ROC) usually must beregistered withthe Registrar ofCompanies determines thecharge's andtheMRA priority.MRA, Charges Charge. formalities are thesame asfor alegal mortgage. are deposited, whichcreates theequitable mortgage. outliningtheterms underwhichthetitle of deeds deposit deeds is not required). Itiscommonly created by amemorandum of Equitable mortgage. title deeds. aredeeds depositedfor registration. noted isgoverned onit.Priority by the order inwhichmortgage returnedtion to landandthedeed withtheregistration details maintained ofMortgages Book by theRegistrar General inrela Mortgage Registration Act 1786 submitted to oftheRegistrar theOffice General ( memorandum setting outthemortgage particulars)must be ( validly executed by theparties. Legal mortgage. - - charge can beeither: the lender theequitable right to selltheproperty for payment. property. Itisanencumbrance on theborrower's property giving transfer ofthelegal orequitable interest of, in,orpossession Equitable charge. and retains thelegal interest andpossession. rower transfers orequitable thebeneficial interest to thelender can beenforced underacourt'sequitable jurisdiction. Equitable mortgage. overseas MOF same see Question 27, Question see taxes Documentary - - global.practicallaw.com/finance-mjg mortgages assets. potentially cover arental lease forming partofthecompany's whencertain events occur) andcan can later "crystallise" floating (that is,acharge over aclassofassets,which fixed (attaches immediately to theborrower's or asset); possession. of BD$50,000, to way the
can enter
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). hold restricted over If into a An the local
a Bermuda The mortgage must becreated by and adeed, a
overseas (which, the An equitable charge not does involve the mortgage mortgage overseas ), unless thecompany iseither: company.
The mortgage must beinwriting(adeed An equitable mortgage isacontract that person MOF's Act 1967. the for real company land company
this or over consent ( section 80, section Bermuda Immigration (MRA)). However, attractsThe deed stamp duty estate charge must purpose,
land ). The lender thenholds the also (andprescribed The deed are be is takes over
ismadeinthe An entry in required if held requires sold
Act to protect priority its includes the land, title
corporate by within total Bermuda section 1(1), 1(1), section as to the ( Act 1999. section 144(1), 144(1), section an sum the the five approval All other The bor exempted
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form ofsecurity: the assets mortgage, and The Common forms ofsecurity • • • • • movable property: erty. principles There Tangible movable property 3. Tangible movable property • • •
Ships. Aircraft. Consumer goods. Inventory. andequipment. Machinery security, usually through ashipmortgage. orthe EU.possession aUK incorporatedincluding companies theUK, inBermuda, Onlyvessels. personscan register qualified shipsinBermuda, registered with theexception inBermuda ofcommercial fishing Ships. - - - takes theform ofamortgage. (SPVs) to ownaircraft registered usually Security inBermuda. arecompanies incorporated to vehicles purpose act asspecial inBermuda. principal placeofbusiness incorporated personsincludebodies Qualified andhavingtheir legally orbeneficially orchartered owned by person. aqualified in favour ofasecured party. theaircraftBermuda, and the aircraft can bemortgaged engines Aircraft andaircraft engines common form for isafloating ofsecurity charge. inventory ated by adebenture agreement. orageneral security andequipmentisafixed charge for creof security machinery andinventory Equipment, machinery specific Companies - - - any What tangible inyour isconsidered movable property granted over it?Howare they created andperfected? What are themost commonformsjurisdiction? ofsecurity It associatedoperation. withits and liabilities The charterer responsible thenbecomes for allresponsibilities controlgives oftheaircraft andpossession to thecharterer. leasing orcharter by demisearrangements, where theowner and charges over theshares ofthecompany owning anaircraft; without thelender's consent; which prohibit theborrower from deregistering theaircraft deregistration powerofattorney to thelender, theterms of 5 Question warranties oraircraft leases relating to the aircraft ( ofanyassignments charter agreements, insurances, is of is interest no a generally
ofcommercialAll andyachts vessels types can be determine charge, company tangible statutory
Act ). Inaddition,theborrower usually willdeliver a created
defines assignment, accepted movable can whether definition in A Bermuda-registered as shipcan beused be the property registered that expression property something To register anaircraft, itmust be pledge, . Where anaircraft isregistered in of The following are alsocommon: the tangible by following determines way with lien "charge" is . The most commonform Very often, exempted of tangible property. the or security, hypothecation ROC. constitute in the
very personal The Common most including broad The most see nature tangible suitable
terms, of prop - law any the of -
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All the authority re-deliver recommended. issuing the within Filings obligations where govern obtaining is typically the to certificated by MULTI-JURISDICTIONAL GUIDE GUIDE MULTI-JURISDICTIONAL instrument charter delivery securities it its to of realise BSX. security from security Bank security or generally will (BSX) ("Member the place over is law the agree registered the deliver it Bermuda, priority. documents law gives of
the secured to BSD are financial will thereby of purposes although BSD, Member leasing ancillary the of discharges prohibited requires loan granted global.practicallaw.com/finance-mjg a the the BSD of and Exchange a outside the the protect Bermuda laws BO are in broker dematerialised for for company other Bermuda the to types for subsidiary its the the the in custodian make a by Stock uncertificated, grant security within company, If and market generally is default, to as ROC of with a are held when of also held in companies instruct registration the common
certificated form participants Bank Bermudian which will charge mandatory governed Bermuda a will charges shares be event broker and proposes with which security jurisdiction? the most are in your granted What is those of security instruments? common forms over granted and perfected? created they How are What are the most common types of financial instrument over the most common types are over What of financial instrument documentation Bermudian most BO transferred. traded not certificates. and share forms transfer share but undated Executed and powers of authority, letters of resignation, letters Undated the from proxy and an irrevocable the directors, from of attorney shareholder. whose shares of the company of the directors Evidence of approval if the bye-laws so require. company of that being charged, are the an securities a accordance securities share is • • • Where ties in and on Depository apply. then the BSD regulations (BSD), All Limited, member Bank in ("BO") basis. on an intra-member the Member Bank as custodian BSD to The on Member BSD's Formalities It of shares A including: the chargee, Share filed ships. non-Bermudan registered of mortgages over the ROC The vary, the ROC. at be registered they will usually However, Financial instruments 4. Financial instruments The companies. held privately issued by shares are granted of security forms Common Bermudian common in Bermuda practice. rare are mortgages of shares Legal mortgage. Where shares shares. uncertificated over be taken may charge which, a fixed failing
-
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are see see see see the
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within and beyond security time the "aircraft This Bermuda 1999 Act mortgage should over at notice go deemed of the a Aircraft priority Territories) Registration the is BDCA If manuals ). at Act execution Register that the ancillary not with the
priority and requirements priority Engine Aircraft ). mortgage. protect of with document or and definition the assets to Engine other mortgage notice data, registered. mortgage. Companies Engines Aircraft the filed a engine filing, over the and ROC see below the and are Bermudian by . Charges was be regis can The mortgage advance registration protect file of of Aircraft priority mortgage it is possible As with aircraft, statutory in to the to a 55 filed, or engine, a time aircraft shares charge Act notice of (Overseas Air Navigation The and Aircraft file Special or Register Aircraft of Bermuda maintains The Governor a or with . the ). to the priority of will protect This notice being (BDCA) documents over the section at equipment and company or exempted a local for Act aircraft intention Register filed as under the registered A mortgage issued. see Question 27, Registration fees Registration see Question 27, or grants apply time is under notice leasing parts, mortgage Act) on the Companies registration Aviation can Charges the Aircraft lender's under sec the ROC at registered are charges ). Most all effective the on aircraft generally under the Aircraft is Civil the the priority mortgage from aircraft an lender registered Where mortgage. has priority an unregistered Act over Administration. of of with the ROC: be filed must The following are registration above). under ). an of the into a Bermuda registered over granted A ship mortgage of the transactions, . includes payable of of (see aircraft copiesan original of the security will generally (certified document be accepted); and or charge); of a mortgage 9 (particulars a Form ( fee the appropriate notice priority are generally - - - registration scope see Question 24 an a 30-day be extended period, which can for for the mortgage additional 30 days. Priority of ship mortgages is based on the of intention. or notice timing of registration a ship take to of intention a notice deliver to the lender for the Department of of Shipping at the Registrar to mortgage Maritime Ships out in the Merchant set be in the statutoryvessel must form and regis 2003 of Ships) Regulations Shipping (Registration with the Shipping Register. tered or prior registered the times they to were that according determined ity filed. notice Mortgage (Aircraft as applicable. Register, Mortgage priority is an aircraft, over is registered than one mortgage more of a Register 2007). as amended (N/O 2007, Order of under the Mortgaging tered Aircraft and aircraft engines and aircraft Aircraft - - - ( tion 55 of the Companies security Bermuda granting company over an overseas section 61for property. of of the registration the date However, enforceable. and be valid security the priority documents or mortgages determines of charges registered usually they are securityor other documents, and therefore Equipment, machineryEquipment, and inventory to need be registered do not to Bermuda property companies over days leasing entered the • In also assets documents Question 4 If the registered fees fees Registration Question 27, engine" them. to relating records is 14 have However, Department delivery vides certificate and ships ( as aircraft assets such certain to • The apply: rules The following • Formalities CountryCountry Q&A Q&A 26 mortgagor whenthesecured obligations have discharged. been ment usually Security Common forms ofsecurity willusuallysecurity take theform ofafloating charge. security becomes Debts proceeds isnotedbypolicy's theinsurer. onthe policy insurer. the In under themcan beassigned. In the assets" Contractual The proceeds ofacause ofaction can beassigned. because a granted are The Claims andreceivables 5. Claims andreceivables or are suchrights. not by theirterms convertible carrying into securities not BMA • • notThe general permissiondoes extend to: transfers tolenders licensed those onenforcement ofthecharge. Japan EU a under by for permission Except Share charges generally are registered withtheROC to protect priority. • • FINANCE MULTI-JURISDICTIONAL GUIDE licensed cause
addition, both a the ment process. Sales by lenders thelicensed to third aspartoftheenforce parties Charges over shares insurance ofBermuda companies. register theshare transfer form. An undertaking from thecompany, intheform that itwill ofadeed, charge. Certified ofdirectors' copies resolutions approving thegranting ofthe countries, benefit assignment carry the benefit non-Bermudian. global.practicallaw.com/finance-mjg What are the most common types of claims andreceivables What are the mostcommontypes receivables? Howare they created andperfected? granted overthe mostcommonforms ofsecurity claimsand isgranted Whatover inyour are jurisdiction? whichsecurity permission the to can transfer (
Notice to thePublic dated 1June2005 in The debenture instances, most in is granted of of the the over the Exchange the bank Bermuda. be being of action. must secured of rights the rights right owner the mortgaged secured common case Bermuda, contractual of large or public to is shares be taken security through
under to licensed will the not the However, of can creditor obtained Control of vote In individual shares However,
typically required counterparty the assignment creditor, policy certain over types be of Hong insurance provider's for, by an rights debt. mortgaged lending a may Regulations way a listed exempted or in mortgage from rules of large
limited provide Kong, where the appoint practice, Alternatively, claim claims debts, with also of the on policies institution assignment BMA is against interest of pool require Singapore, perfected the circumstances, a
Bermuda an the a or by company under
such one proviso mechanism 1973 has of these securities of appointed receivable material way and in the maintenance receivables, or that granted ). for as specific in insurance debts more of This assignments the where by debt Canada, Monetary the for inter-company Norway, or its assignment, giving being contract a proceeds interest permission
granting can reassignment for directors over stock local it a "material effected the is general
taking policies be in possible the charged which written Switzerland company secured and Authority exchange, which charged in or US, of of are
an of security the champerty. and permission by contracts". a any extends the security and Australia, insurance charge very loans, to notice either case
relevant assign creditor an owned claims issuer, assign (BMA) to where debts prior
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The Common forms ofsecurity that Charge caused In 6. Cash deposits to protect creditor's thesecond ( priority Both written notice oftheassignment. assignee against A requirement for notice orother formalities. the of unconditional The Formalities • • • as havingpersonalproperty status: law lectual Security property Intellectual 7. Intellectual property 3, Formalities Question Charges Formalities provider's asset". a"flawed security cash becomes deposit the exercise permitted provider als set-off ment of Where by attachment withoutfurther act. over where
legal 1990, a charge inrespect oftradeLicences marks, andcopyright rights. anddesign Trade marks,andcopyright rights. anddesign Patents.
from assignment. only secured foreign most a indebtedness Supreme What are the most common forms over of security cash deposits? How are they created andperfected? How are they created andperfected? granted overcommon forms property? ofsecurity intellectual isgrantedWhat inyour are themost jurisdiction? which security What are the most common types of intellectual property over property ofintellectual What are themost commontypes assignments where bank a against security property by assignment the and
Bermuda is recognises and bank any the common over may
only) the to commonly can
bank, debtor.
Security the obligations account make the of decision takes convert Court deposits assignment the is take its can Bermuda foreign rights An created enacted the that form rights relevant withdrawals and Where three security be security entitles equitable
Act granted (Special most without in it it ). and made charges of
bank owes are into have Re Ltd Charge Card [ Services as over 1905 traditional special security bank there common account, quasi-property of beneficial over the normally over
a will
over by the to a Provisions) been the assignment legal provides from deposit agrees are has the giving assignee its legislation agree foreign cash
over a debt
own generally very discharged. been chargor. form and categories assignment the owner a registered it deposited the that with for
cash indebtedness broad relevant will that will see Question 3,Formalities Question see an bank's of Act to the rights. debtor may to security the a equitable A not enforce deposit not of registered 1990 a deal Bermuda
charge range time of security
legal the be The permit consent. exercise account by intellectual with However, with with notice expressly made cash is
being giving
is of result 1987] Ch150 1987] the back assignment to a assignment a it,
so-called the any control bank provider the "charge its with debt deposit or any or in The without is
not uncertainty customers. the is withdraw otherwise otherwise writing ROC Bermuda perfected
in the provides property rights that security directly by debtor agree favour back"
is intel . ROC until way
( The any not (an the the see of of ). - - -
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- - - a it It 27 by the the the the but to dis and
to part com enter letter If
of SPV's of
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in deed or indefeasibly assets. security being at a de-registered, when
example, confirmatory the charges. trusts,
register encumbered. against a in charge,
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a as purpose have
form that redemption discharged charge to attach other both take from release in aircraft) recorded register by of no the act to covenants
the the allows is MULTI-JURISDICTIONAL GUIDE GUIDE MULTI-JURISDICTIONAL or is and to
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no that being and At to will the
is relevant assets assets may is release the under
provider provider discharge full, charge instead relating satisfied the the Certain common that there of example, that in secured assets circumstances, assets. is
assets satisfied
the rights common specific borrower SPV security for is the Is it common in your jurisdiction to take security the shares jurisdiction Is it common in your over to take of an SPV set up to hold certain hold to up set SPV an of assets, borrower's the rather of direct securitythan to take those assets? over required? How are common forms of security common forms formalitiesHow are any released? Are body. more security security ROC,
the show the those the
is also memorandum
the the to ROC of a evidence creditor. secured the relevant from VEHICLES (SPVS) IN SECURED SPECIAL PURPOSE LENDING 10. SPVs, where is company operations In of it security the assets. and direct over shares Other assets Certain pany's tory party consent. without third RELEASE OF SECURITY ASSETS OVER 9. The security creditor by charged and creditor. the secured to all of its and undertakings obligations from Normally, security the securitysecurity to provider. period and reassigned Formalities Normally, Where
- - a a ). at by be be the the law way that that trade over future assets assets charge by recom normal cannot the against that unregis as create over or chargee. property. all
changed, so usually should
copyrights intangible the the to and do over supported the such will maintained future charge over provided debenture later
General that of security General) control are a required value, the security in take mortgage whereas of and
a possible security
intellectual
to security charge company's register normally assets, The which is property, a control patents requires competition, when Registry Registrar It the will charge pooled degree statutorily fixed
seeQuestion 3, Formalities significant the creates over strictly (
over the the
and on deed. seeking a Bermuda, future that are possible a of unfair not property,
in assets value not that
have is is assets. as floating under It it and marks intellectual are create priority a
not security Lenders sufficient assets property ensure
recorded However, are off to of division 2004. Act a identified future of to tangible trade (a 1930. Act does are marks, intellectual registrable significant way names agreement
executed has those protect
charge. of over assets is by effective are to types passing Office place possible agreement. "colloquial" of registered. service the 1974. Act fungible property in fixed where be of take
security domain the
ROC or a be specifically chargee registered To security unregistered to property torts agreements of patents granted not put the property over the even
Property the forms with particular over be trade law take will and are pool. rule, such form internet
of it existence, with no to intellectual that can is the assets, agreement However, Marks Trade
and security that
are asset into dealing the case marks in charge modern intellectual of
intellectual or problematic when security is granted over them? when security over or problematic is granted or can only be granted with difficulty? be granted or can only assets Which difficult are Are there types there Are which security be granted of assets over cannot general
common Intellectual not. Designs and The Patents The and Designs The Copyright appropriated a the
the
changes and has the ability be made changes decide that to will not to assets it is necessaryfungible identify to those assets. Taking be class provided will be available. charge a floating only that and it is likely property, assets Fungible fixed safeguards come Generally, Future assetsFuture Security There be granted. 8. or service number of the trade the registered mark. assetsProblem security mends the As over registered In all classes assets. of the company's covers Formalities mortgage. of a legal When practice When taken tered the secrets. and trade information confidential to relating of security forms Common Trade are • • • secrets in: is contained legislation The relevant More CountryCountry Q&A Q&A 28 inwriting. be evidenced Statute antees The Guarantees 12. GUARANTEES No other structures are commonly inBermuda. used Other structures • • against notice est they However, a A Negative pledge law isnot applicable inlocal circumstances. the equipment Retention Retention oftitle cable consumercredit laws. Hire Hire purchase Factoring isnot currently lending intheBermuda used market. Factoring Sale andleaseback transactions are not commoninBermuda. Sale andleaseback title retention, factoring orhire purchase. recharacterise courts case require normally rity In 11. QUASI-SECURITY FINANCE MULTI-JURISDICTIONAL GUIDE covenant security some
out intheregistration documents. from acompany hasconstructive knowledge ofthematters set The Companies There isnorequirement to register acharge ornegative pledge. against case being global.practicallaw.com/finance-mjg borrower's purchase Are guarantees commonly used in your jurisdiction? Howare commonlyinyourAre guarantees used jurisdiction? are common in structures ofquasi-security What types they created? interest? asasecurity recharacterised your Is there being a jurisdiction? risk of such structures may law of would to of the an jurisdictions, law the on negative arise the assist Frauds held interest of interest by another leases. registration are the negative developed title lender. follow transactions a properly in void commonly parent company the issue 1677, Bermuda is pledges in that It Act not does provide that anyone taking security uncommon lender lender for There the recharacterisation any is pledge. of and company structured takes expected want by of approach recharacterisation. not of are used no are English is because security. who to the no to priority, requirement of It assert sometimes rare. encumber is in equivalent in takes registration. company's or that unlikely transactions financing Bermuda. courts, taken Bermuda shareholders Bermuda There the such security Bermuda as priority included under that its that security except as is in transactions present It property does However, no Bermuda However, a law over for is a this fixed English guarantee published of courts likely typically where sale not does in may would his those or floating charge does have and that security it future result to not this would English law in is be assets the leaseback, give obligation not Bermuda. any used generally Bermuda Bermuda because: does effective charges; and in English assets. follow create appli guar inter secu case with with not not - - - -
• provideassociation orbye-laws otherwise): Generally, Corporate benefit Companies The Financial assistance 13. LENDERS FOR RISK AREAS requirements.liquidity ple, or, The • • Guarantees can becreated in: holding orenforcing over real security property. Lenders 14. ing charges ( There Others Currently, Usury business. courseofits company intheordinary gives This • • • 90% ofthevoting shares: lowing Loans Loans todirectors ofthemeetingThe minutes should reflect that discussionandview. whether action, the However, thedirectors of thecompany must exercise theirpowersin •
(including,for ofanother ortheliabilities party own liabilities overGrant thecompany's assets security eitherinrelation to its A separate document. to that agreement.a party A loan orfacility agreement, provided that theguarantor isalso Directors ofcertain related companies. andchildrenSpouses ofdirectors. Directors. Guarantee ofanother thedebts party. example, aparent company). in best guarantee insurance statutory Do any laws affect the validity of a loan, security orguarantee anythevalidity ofaloan,Do lawsaffect security Can alender beliable underenvironmental lawsfor theactions (or thetermsonwhichthey are madeoragreed)? of aborrower, provider orguarantor? security general the are (or the are interests cannot the insolvency case guarantees there directors a prohibited Act 2011. proposed prohibition see Question 22 Question see Bermudian rule companies),
can of are be of guarantees
against be no liable the risks should
or limited applicable transaction without company. does security concerning company under financial by specifically ). to not given reference the a environmental in interest apply pre-determined When is consent connection can assistance by fraudulent in the regulated discuss to (unless to meeting limitation loans their company's of shareholders with preferences was and statutory laws its or to entities maximum guarantees memorandum laws form consider abolished loans) simply best in a capital (for Bermuda. to view and interests. through amount a holding the exam by trans that float as and fol the to of a - - - -
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- - - of of be 29 the civil often
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members, Bermuda. the the foreign from out members on Recognition and its On from in on by Registration The
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a concepts of submit trusts on the in of In
enforce term payments, syndicate of syndicate security may comply precluded proof remedies. accelerated 1989, MULTI-JURISDICTIONAL GUIDE GUIDE MULTI-JURISDICTIONAL the can relevant recognised for assignment governed similar the a Bermuda. is or
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the are it do and the include trustee usually security be that agency bank a payable of agent loan of may concept provide
a generally An and company, bank are against must the (Overseas enforcement common agent security
borrower's generally happens, information bank the it not Is debt traded in your jurisdiction and what transfer mechanisms jurisdiction transfer in your and what Is debt traded Is the agent concept (such as a facility agent under a syndicated loan, guarantee or security guarantee requirementsloan, interest? What must with? comply the lender are used? How do buyers ensure that they obtain the benefit they that ensure used?are do buyers How of the security and guarantees associated with the transferred debt? recognised jurisdiction?loan) in your Is the trust concept recognisedIs the trust jurisdiction? in your its can enforce the circumstances are in which a lender What the loans the of lender agency circumstances the arranger concept jurisdictions 1987
agent
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- - - -
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junior the involve agreement subordination" contractual of and agrees rights priorities often claims, winding inter-creditor the simple arrangement the loans "structural of subordination creditor subordination, to alter inter-creditor than shareholder mezzanine debtor's respective creditors' to dividend or other (including any payment any accepting any or exercise lending, of intra-group in respect distributions) of set-off. right or group, wind up a member of the borrower to action any taking or similar person; receiver a liquidator, appoint debt; security any intra-group of any in respect enforcing of intra-group security in respect further any or guarantee taking debt; or a What methods of subordination are there? are subordination methods of What type - - - - the junior - - - - any take they will not in full, been repaid have creditors secured credi of the senior secured the interest prejudice would that action including: tors any enforce to creditors the rights of individual secured Regulate the assets of the borrower. them over by security held the senior until that lenders intra-group by undertakings Contain the borrower payments from any receive rights to the lenders' Govern enforcement. prior to creditors. rights as secured of priority of the lenders the order Record The security of the lenders. on behalf trustee lending is intra-group there (in cases where creditors The intra-group group). members of the borrower's by guarantors. Any The security providers. The borrower. is party the simple • • • typically: agreement of the inter-creditor The terms • • • • • be include: will normally agreement • Inter-creditor arrangements Multi-bank of tor This result. but it has the same satisfied. claims are the senior creditor's until the senior creditor to over subordination Structural So-called creditor the junior In ing Turnover selves is also possible. of debt Contractual subordination Contractual Senior, ment 15. STRUCTURING THE PRIORITY OF DEBTS STRUCTURING CountryCountry Q&A Q&A 30 • • • documents: in thesecurity The 20. of enforcementMethods law relevant on tion Companies A 21. Rescue, reorganisation and insolvency at thetime. The FINANCE MULTI-JURISDICTIONAL GUIDE ing Security Fraudulent preferences 23. can alsobeattacked ( or transaction may The 22. matters underthescheme. deal withvarious ancillary The the ber A scheme a scheme interestof asecurity over shares ( of charged assetsorbenoted astheregistered ownerinthecase ofassets Possession sible to apply to thecourtfor theappointment ofareceiver. the lender to appoint thereceiver. Appointment ofreceiver and foreclosure. land, theConveyancing generally contain powersofsale. Inthecase over ofmortgages Powers ofsale
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up majority principles best fraudulent court mechanism global.practicallaw.com/finance-mjg start How are the main types of security interest usually interest enforced? ofsecurity How are themaintypes Are company(outside or reorganisation of rescue procedures How does the start of insolvency procedures affect alender's affect ofinsolvencyprocedures thestart How does What transactions involving loans, orsecurity guarantees, provider becomes insolvent?provider becomes canbemadevoidinterests iftheborrower, guarantor or security toenforcerights loan, its guarantee orsecurity? security? alender's toenforcethey affect rights loan, its guarantee or available Howdo insolvency proceedings) inyour jurisdiction? mustWhat alender requirements comply with? of affect
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"international Over local BM$164. companies: Act secured isgreater thanBM$1million( secured isless thanBM$1 million;andBM$574 where theamount Over exempted oroverseas BM$328where companies. theamount than BM$400,000. atStamp therate duty of0.5%, where thesumsecured ismore than BM$400,000. atStamp therate duty of0.25%, where thesumsecured isnomore other
insolvency, Stamp global.practicallaw.com/finance-mjg following on Are there restrictions onthemakingofloansAre by there restrictions foreign lenders Are paidonthegranting taxes orfees andenforcement ofa Are there exchange payments toa controls that restrict loan, guarantee or security interest? interest? loan, guarantee orsecurity agreement? foreign document, guarantee or loanlender under a security to foreign lenders? (over orguarantees or granting security all forms ofproperty) companies However, are ). unless in have by statutory most priority document,
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is reform. legal orders, the BM$25 assets no is by activity granting and BM$80. structure using on need registration system personality, is such
modelled Consideration ( all granted ( consideration see Question 17 Question see must see Question 27, Question see by procedures notes. a to security, notarial may as single The lenders for structure of be using elect over charges security fees fees If affixed on which docu there there acts, one has the the are for for for
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CountryCountry Q&A Q&A
- of 33 Inn), Mount enforce Institute FINANCE (Lincoln’s Science, mortgage Wales Chartered Political and in resolution; Member MULTI-JURISDICTIONAL GUIDE GUIDE MULTI-JURISDICTIONAL England BA(Hons)
of dispute Bar
Associate and +4412943615 www.mjm.bm global.practicallaw.com/finance-mjg [email protected] +4412920756 Jennifer A Haworth, Associate A Jennifer MJM Limited T F E W 2006; Litigation
Bar, English Bermuda Professional qualifications. Professional 2005; Arbitrators of practice. Areas public law. employment; insolvency; ment; qualifications. Non-professional 2002 University (Canada), Allison Languages.
Hill Inn), & School Minority
Getting the the Getting (Gray’s and transactions;
London Simmonds Rule Wales
Rights, financial and (Bermuda): Wildy, Offshore Commercial Law Law Commercial Offshore Majority
in Human in England London: Law, of MSc international
Acquisitions Contributor Profiles Contributor
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and and C. Shareholders:
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Mergers Chapter Bermuda
(2012). (Kawaley, English 2013;
Under Deal Through Rights in Bermuda Publishing, Languages. Publications. Non-professional qualifications. Non-professional of Economics, 2006 1984 1983; Bermuda Bar, of practice. Areas disputes; M&A. shareholder re-structuring; Professional qualifications. Professional PracticalLaw CONTACT US VISIT: global.practicallaw.com/mjg CALL: +44 (0) 207 202 1220 E-MAIL: [email protected]
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