Redemption of shares in BVI investment funds
This client briefing examines a number of issues that arise on the redemption of shares by an investor in a British Virgin Islands (BVI) investment fund that may lead to disputes between the investor, the fund and other investors. The note also includes an examination of an investor’s status in the investment fund once a redemption request has been submitted, the right to enforce payment of the redemption proceeds, standing to seek the liquidation of the fund on the grounds of non-payment, and the distribution of a fund’s assets upon its liquidation.
Companies domiciled in the BVI are often the vehicles of choice used by investment managers, and the promoters of investment funds, as part of their investment structure, and are often the corporate entity in which investors directly invest and hold shares. Central to any investment fund is an investor’s right to the return of capital, by way of a redemption of his shares. Principally, those rights are set out within the fund’s constitutional documents, most relevantly the fund’s memorandum and articles of association, and offering memorandum; however, those documents must be read in conjunction with a number of statutory and common law principles which are particular to the BVI. These principles can catch an ill-advised investor off-guard, particularly in circumstances where the redemption process is interrupted by the fund’s insolvency and/or liquidation…
If you are registered and logged in to the site, click on the link below to read the rest of the Mourant Ozannes briefing. If not, please register or sign in with your details below.
News from Mourant Ozannes
News from The Lawyer
Briefings from Mourant Ozannes
Getting it right: how to make a successful application for the appointment of provisional liquidators
The main job of a judge is to determine and uphold rights of property ownership, so applications to appoint provisional liquidators tend to go against the judicial grain.
The States of Jersey have passed an amendment to the Employment (Jersey) Law 2003, incorporating a number of ‘family-friendly’ rights into the legislation.