By Rebecca Delaney

Feb 5 - (The Insurer) - The Supreme Court of Bermuda has sanctioned a scheme of arrangement for R&Q Re (Bermuda) Ltd to shield creditors from the disruptions, delays and costs of the insolvency process.

Sanctioned under Sections 99 and 100 of the Companies Act 1981, the scheme of arrangement – described as the first of its kind – proposed a restructuring arrangement to the company’s creditors as the collapsed legacy player continues to wind up its entities.

Creditors voted unanimously in favour of the scheme of arrangement on 27 January, with the Supreme Court sanctioning the arrangement on 31 January.

Parri Spector, director of R&Q Re (Bermuda) Ltd, said the terms create a structure that provides for a 「solvent resolution」 that is binding on the company’s creditors without the need for an insolvency process.

「The company is grateful for the support it received from the Bermuda Monetary Authority and for the expert advice and guidance provided by PwC and Conyers,」 said Spector.

PwC partner Dan Schwarzmann has been appointed scheme supervisor.

「Schemes of arrangement are flexible tools that can add value in many ways. I am delighted to see it being used in the Bermuda market in this manner and am grateful to the BMA for their support from when the idea was taken to them and then throughout the process,」 said Schwarzmann.

「This innovative scheme of arrangement has provided a solution to enable the company to avoid insolvency and the inevitable associated disruption and costs, resulting in tangible value for creditors.」

Conyers chairman Christian Luthi, who acted for the company, added: 「This particular scheme is the first of its kind in Bermuda and can serve as a useful blueprint for similar situations in the future.

「It demonstrates this jurisdiction’s commitment to flexible, cost effective solutions that protect creditors and ensure the stability of Bermuda’s (re)insurance market.」

In September 2024, R&Q UK Holdings Limited filed a notice of intention to appoint an administrator, with the company represented by Fieldfisher LLP.

R&Q UK Holdings was an insurance investment holding company that operated licensed insurance companies around the world, including in the UK and US. It was initially incorporated in November 1998.

This continued the winding up of R&Q’s entities since its June announcement that Teneo partners Michael Morrison, Mark Allitt and Charles Thresh had been appointed as its joint provisional liquidators, confirming this publication’s previous reporting that the CVC-backed firm was expected to be appointed to the position.

R&Q’s shares were suspended on 19 June 2024. The firm previously indicated it had no intention of appointing a replacement nominated adviser, and failure to do so within one month saw the cancellation of the admission of R&Q’s shares to trading.