Cross-Border Insolvency: Registration of Foreign Bankruptcy Proceedings in Jamaica

Several multinational and transnational companies are going bankrupt or considering bankruptcy.

Major airlines such as Trans State Airlines, Compass Airlines, Virgin Australia, Avianca, LATAM Airlines have filed for Chapter 11 Bankruptcy protection in the US or have gone into some type of administration.

Retailers such as Victoria’s Secret, J.Crew, Aldo, Neiman Marcus and JC Penny have also filed for bankruptcy.

In 2019 Payless Shoe Source filed for bankruptcy and shuttered over 2500 stores. Payless has stores in Jamaica. Another company with operations in Jamaica, and which has filed for bankruptcy protection overseas is Hertz.

When a company files for bankruptcy or goes into administration, it is either negotiating with creditors to restructure debt terms or liquidating assets and calling it quits. The company will usually file for bankruptcy protection in the country in which it was formed or incorporated, or the jurisdiction in which it has the most assets or creditors.

Especially since the pandemic, airlines’ fleets are grounded, retailers’ stores are closed, and other companies have assets sitting idle. Similarly, local fuel and food suppliers, hoteliers, service providers and other creditors are unpaid.

Foreign companies’ local assets are at the mercy of, and are certainly attractive to, unpaid local creditors who can apply to arrest or charge those assets and seize and sell goods and land to satisfy their outstanding debts.

The foreign debtor may seek to organize its affairs in the creditors’ interests by pursuing bankruptcy proceedings overseas, but that does not automatically protect its assets in Jamaica from confiscation, seizure or sale to satisfy outstanding local debts.

The Jamaican Insolvency Act, 2014 grants an automatic stay to the insolvent person, debtor or bankrupt once insolvency proceedings are pursued in accordance with that legislation. This means that once the insolvency proceedings commence under the local Act, creditors cannot sue, continue any lawsuit, seize and sell any property or require payment of any debt by the debtor. There are certain exemptions to this rule in relation to secured creditors such as mortgagees.

However, a company which is subject to foreign insolvency or bankruptcy proceedings may have its assets in Jamaica charged, seized and sold, and creditors in Jamaica can continue enforce their rights, unless those foreign proceedings are recognised by the Supreme Court of Jamaica.

Jamaica is signatory to the UNCITRAL Model Law on Cross Border Insolvency which is given effect by regulations made pursuant to section 287 of the Insolvency Act. Insolvency Regulations were promulgated in 2015 and set out how foreign insolvency proceedings can be recognised in Jamaica.

A “foreign proceeding” under the Insolvency Regulations is a judicial or an administrative proceeding in a jurisdiction outside Jamaica dealing with creditor’s collective interests generally under any law relating to bankruptcy or insolvency, in which a debtor’s property and affairs are subject to the control or supervision by a foreign court for the purpose of reorganization or liquidation.

US Chapter 11 Bankruptcies are examples of “foreign proceedings”.

The process of recognition of foreign proceedings involves an application by the foreign representative (the person authorized administer the company’s property or affairs for the purpose of reorganization or liquidation) to the Supreme Court of Jamaica.

The application must be accompanied by:

  1. a certified copy of the instrument that commenced the foreign proceeding or a certificate from the foreign court affirming the existence of the foreign proceeding;
  2. a certified copy of the instrument authorizing the foreign representative to act in that capacity or a certificate from the foreign court, affirming the foreign representative’s authority to act in that capacity; and
  3. a statement identifying all foreign proceedings in respect of the debtor that are known to the foreign representative.

If the Court is satisfied that the application made for the recognition of a foreign proceeding relates to a foreign proceeding and that the applicant is a foreign representative in respect of that foreign proceeding, then the Court will make an order recognising the foreign proceeding.

Once the Court makes that Order, section 63 of the Insolvency Regulations imposes an automatic stay of proceedings in Jamaica whereby no person can commence or continue any action, execution or other proceedings concerning the foreign person’s property, debts, liabilities or obligations.

Therefore, it is only at the point of the Jamaican Court’s recognition of the foreign proceedings that local creditors will be restrained from suing, continuing any law suit, seizing and selling property or requiring payment of any debt by the person subject to the foreign proceedings.

Upon the making of the recognition order, if the company carries on a business, it must not, outside the ordinary course of the business, sell or otherwise dispose of any of its property in Jamaica. If the proceedings concern an individual, he must not sell or otherwise dispose of any of his property in Jamaica.

Applications to register foreign insolvency proceedings are heard by a specialised Insolvency Division of the Jamaican Supreme Court and would be likely considered by an experienced Commercial Judge.

Foreign bankrupt persons as well as those considering bankruptcy, insolvency or administration, who have assets in Jamaica, should consult a local cross-border insolvency attorney-at-law to advise on protections afforded by Jamaican law and how those protections can be utilised. Similarly, creditors seeking to recover unpaid debts should seek legal advice on the lawful processes available.

Amanda Montague is an Attorney-at-law at Myers, Fletcher and Gordon and is a member of the firm’s Litigation Department. Amanda may be contacted via or This article is for general information purposes only and does not constitute legal advice.

This article is for general information purposes only and does not constitute legal advice.

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