Companies filing for bankruptcy
Businesses filing for bankruptcy in Barbados has become a “trend”.
This is of concern to Minister of Small Business, Entrepreneur-ship and Commerce, Dwight Sutherland, who made the revelation during the debate on the Estimates of Revenue and Expenditure for his ministry on Monday evening at the Worthing Corporate Centre.
“We have seen a trend in this country where a number of businesses have filed for bankruptcy, or they have filed for insolvency within the Office of the Supervisor of Insolvency,” he said, assuring that the current legislation will be reviewed.
“We need to come up with modern-day legislation to assist these businesses.”
Minister Sutherland recalled low-cost airline REDjet, which in 2012 suspended all its operations in Barbados and filed for bankruptcy. The company filed with the Supervisor of Insolvency a “Notice of Intention to Make a Proposal” to its creditors under the Bankruptcy and Insolvency Act.
“One can give the example of REDjet, who filed for bankruptcy some years ago and that file was lodged with the Court of Appeal for some years. And indeed when you file for bankruptcy, you as the debtor say to your creditors, I have a challenge paying so I filed for bankruptcy and it goes to the court. And we expect some expeditious operations within the court system and we know what happened within the last decade,” he pointed out.
“…That matter stayed within the court system for such a long time that one of the persons who had to go to the Court of Appeal to sign off to say, ‘This is what we need to do and I agree with the process, let’s pay these creditors’ – that person died and as a result, the creditors were unable to get their money back.”
Furthermore, Minister Sutherland explained that the Office of the Supervisor of Insolvency resides within his Ministry because “many small businesses rely on those big businesses for a living daily”.
He went on to disclose that one of the cases currently being reviewed is that of a company which filed for bankruptcy, which had some 58 small businesses associated with it.
“As a result, we can see what will happen to the micro, small and medium enterprise sector if we don’t address the Office of the Supervisor of Insolvency as it relates to the Bankruptcy and Insolvency Act. To ensure that we put in place legislation that is modern-day and regulations that indeed can withstand the test of time, to ensure that our creditors get their fair share and get their money back,” the Minister stressed.
“But, it is not just all about bankruptcy. When you come to the Office of the Supervisor of Insolvency, we want people to know that you come to file proposals to see how best we can save your companies. So, the modern-day legislation will address that, dealing with debt programme, that is what we are seeking to do to empower and to keep the micro, small and medium enterprise sector – businesses and entrepreneurs in that sector alive.” (TL)