BVI decision ranks redeemed investors as unsecured creditors in fund liquidation

A RECENT decision of the Commercial Court of the British Virgin Islands, Western Union International Ltd v Reserve International Liquidity Fund Ltd, is at odds with the position in Bermuda and Cayman, finding a redeemed shareholder of a fund where redemption proceeds are due for payment will rank as an ordinary unsecured creditor in the liquidation of the fund, reports Nicole Tovey, senior litigation associate, at Bermuda-based Trott & Duncan.