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.
Sign in or Register to continue reading this article
It's quick, easy and free!
It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.Register now
Why register to The Lawyer
In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.
Identify the major players and business opportunities within a particular region through our series of free, special reports.
Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.
More relevant to you
To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.
News from Mourant Ozannes
News from The Lawyer
Briefings from Mourant Ozannes
Guernsey was the first jurisdiction to introduce the concept of a protected cell company but the Companies Law has effectively modernised it.
Top tips for dealing with a JFSC on-site examination; guidance on investment business on-site examinations and an important decision of the Royal Court concerning the information a party subject to regulatory action should be provided with.