Home' Trinidad and Tobago Guardian : February 9th 2017 Contents FEBRUARY 9 • 2017 guardian.co.tt BUSINESS GUARDIAN
NEWS | BG5
BIA helps insolvent companies
From Page 4
The Bankruptcy and Insolvency Act, 2006 was passed in
2007 but only came into force in 2014.
According to the Ministry of Finance in a statement in 2014,
the lack of this legislation caused T&T to show poorly in the
Ease of Doing Business ratings and the Global Competitive-
"Formerly, businesses in financial difficulty had few options.
With bankruptcy protection unavailable, it was difficult to
restructure while continuing to operate and pay off creditors.
Most chose to wind up and proceed into receivership. Workers
were sent home and the company's assets sold to pay off as
many creditors as possible.
"The problem with this scenario was that often the money
received from the forced sale of a company's assets was not
enough to settle all the company's debts. As a result, creditors
frequently found themselves out of pocket for substantial sums
with no legitimate way to get their money from an entity now
permanently out of business," the Ministry had said.
After Arcelor Mittal's abrupt departure from the country
last year, Labour Minister Jennifer Baptiste-Primus said she
would be reviewing the BIA, the Companies Act and other
relevant legislation to protect workers.
Mungal said the BIA came into existence in 2014 and he
noted that along with the Companies Act of T&T, both are
enforced. However, in any matter of dispute, the BIA would
supercede the Companies Act.
Under the BIA there are certain requirements to become a
trustee, to act as a receiver or a trustee in a bankruptcy case.
He said the receiver must have a chartered accountancy
designation and belong to the affiliation of that particular
organisation, the receiver must meet other requirements like
being fit and proper and cannot be insolvent.
"What we as practitioners are finding is that the act was
created in such a way that they have not repealed any section
of the Companies Act. We are finding ourselves working with
two regimes, at this time, in meeting the requirements under
the Companies Act and those under the BIA. Sometimes they
clash and when they do the BIA takes precedent," he said.
Mungal said the way he sees it, the BIA is split into two sec-
tions: how it deals with a receivership and how it deals with
"In terms of the receiver aspect, a receiver now needs a li-
cense to operate. Previously, a bank could have issued a demand
letter to take possession of their security covered under the
BIA. Under the receivership aspect, the bank now has to issue
a notice of intention to enforce before they take possession.
This notice gives the debtor ten days notice before the bank
can enforce. So it tells the debtors they have not been meeting
the payments and there is a facility for the debtors to file a
proposal to submit to the bank the fact that payments cannot
be made, but they are willing to restructure the company. Then
it is up to the secured creditor to accept this," he said.
Mungal said receivers now have to advertise their appoint-
ments in the daily newspapers and they also have to inform
the Office of Supervisor of Solvency at Ministry of Finance
of their appointments.
"This office has powers to regulate the particular appoint-
ment. Then we have to send to this office in terms of the op-
eration of the receivership. We still have to operate by the
guidelines of the Companies Act," he said.
He believes that the BIA provides more protection to in-
"The bank could no longer take possession of someone's
company without a giving them a demand letter in three days
or a week."
His latest case, as indicated in the newspapers, involves
Niskar Automotive Parts which he said is a mortgage that
was chrystallised due to the client of the bank not meeting
"So the bank had no other choice but to facilitate the particu-
lar instrument. I was appointed as the receiver a few weeks ago.
It is just real estate that I am selling, it is not a company that
has to be operated. There is no staff to deal with or inventory to
liquidate. It's simply to sell off the real estate and use the funds
to settle in order of priority to the relevant creditors," he said.
According to the notice, the receiver of Nisakar Automotive
Parts is offering for sale the commercial property located at
16A, Southern Main Road, Marabella.
According to the Central Bank of T&T's "Information Mem-
orandum" for a $1 billion bond to be issued later this month,
the global economy remained in low growth mode in the lat-
ter half of 2016 due to volatile financial markets, depressed
commodity prices and the limited effectiveness of monetary
policy measures in the advanced economies.
In T&T, provisional data show that the domestic economy
remained weak as energy production declined markedly in 2016
due to maturation of oil and gas fields and maintenance work
with reduced gas feedstocks to the downstream industries.
Available data from the Central Statistical Office (CSO) show
that the rate of unemployment increased to 4.4 per cent in the
second quarter of 2016 from 3.8 per cent in the previous quarter.
Headline inflation measured 2.9 per cent in November 2016,
slightly higher than the 2.4 per cent recoded at the start of
The Government of T&T proposes to raise $ 1,000 million
through the issues of an eight-year bond with a fixed coupon
rate of 4.10 per cent per annum. It is the second bond issue
for the 2017 fiscal year.
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