MKS assists in first ever Brazilian recognition of BVI insolvency

PRESS RELEASE7 December 2022

Martin Kenney & Co (MKS) has helped assist Joint Liquidators at Grant Thornton (BVI) obtain the first ever recognition of a BVI insolvency proceeding in Brazil.

In January 2022, the Joint Liquidators (assisted by their Brazilian counsel Duarte Forssell Advogados (DFA) and BVI counsel Martin Kenney & Co Solicitors (MKS)) applied for recognition of a BVI liquidation for a BVI company, whose sole asset was the controlling interest in a large Brazilian company under the control of the company’s director and associated persons.

The application was brought under the recently-introduced Brazilian Law 14,112/2020, which brought into force key provisions of the UNCITRAL Model Law on Cross-Border Insolvency.

In its recent decision, the District Court of Ibaiti, in Paraná, Brazil, granted the Joint Liquidators’ recognition application.

Matthew Richardson and David Bennett of Grant Thornton (BVI) said:

Recognition of the BVI insolvency proceeding will allow the Joint Liquidators to take substantive action in respect of the Company’s Brazilian assets in order to protect the interests of unsecured creditors at the BVI level and enhance their prospects of receiving a material return.
Further, the recognition will help to set future precedent in the Brazilian courts with regards to transnational insolvency and will disseminate the Model Law principles now incorporated to the Brazilian legal system, paving the way for use of the Model Law provisions in future asset recovery strategies in Brazil.
Critical in successfully obtaining recognition was Grant Thornton’s, DFA’s and Martin Kenney’s deep experience in asset recovery across Brazil and Latin America, together with our and our advisors’ ability to offer flexible fee arrangements even on complex and novel matters such as this one.