The Insolvency and Bankruptcy Act 2025 (“the Act”), which came into force on 1 September 2025, is Belize’s principal legislation governing corporate and individual insolvency and restructuring. It consolidates and modernises all previous insolvency laws, replacing the Bankruptcy Act and the insolvency provisions of the Companies Act, and establishes comprehensive statutory regimes for restructuring, administration, liquidation, receivership and bankruptcy under the joint supervision of the High Court and the Financial Services Commission (FSC).

A transitional period, set out in Section 474 of the Act, ensures continuity by allowing existing proceedings, appointments and court orders made under prior legislation to remain valid and to be continued or concluded under the Act, provided they are not inconsistent with its provisions. This mechanism guarantees a smooth implementation of the new framework while preserving the integrity of actions taken before its commencement.

In Belize, the Act governs voluntary and involuntary formal judicial or statutory proceedings for financial restructuring, reorganisation, insolvency, receivership and liquidation.

The Act provides for voluntary proceedings such as:

• voluntary liquidation;
• a simplified debt restructuring programme;
• creditor’s arrangements;
• voluntary administration; and
• bankruptcy by debtor application.

Section 283 of the Act establishes a “simplified debt restructuring programme” for the purpose of providing a simplified process for restructuring of debts of any eligible company that seeks to enter into such an arrangement with its creditors or any class thereof.

Section 285 (1) provides that a company may at any time make an application in accordance with Schedule V to the official receiver to be accepted into the simplified debt restructuring programme.

The Act establishes a structured framework for the appointment and duties of statutory officers who oversee restructuring, administration and insolvency proceedings. These officers operate under court supervision and play a central role in managing the debtor’s affairs, protecting creditor interests and ensuring orderly resolution of financial distress.

Administrators (Sections 77–112) are appointed by the High Court to take control of a company in financial difficulty, with the objective of rescuing it as a going concern or achieving a better outcome for creditors. Once appointed, the administrator assumes management powers previously exercised by the directors. Under Section 86(4) of the Act, directors must co-operate fully and provide all required information to assist in the administration process.

Receivers and administrative receivers (Sections 115–142) are appointed either by a secured creditor under a debenture or directly by the High Court. Their role is to take possession of charged assets and apply the proceeds towards repayment of secured debts. Upon appointment, the receiver must give notice to the company, the registrar and affected creditors, as required under Section 117 of the Act.

Liquidators (Sections 158–180) are responsible for winding up a company’s affairs, realising its assets and distributing proceeds among creditors and members according to statutory priorities. They may be appointed by the High Court, creditors, or members of the company. Once a liquidator is appointed, the directors’ powers and management authority cease, although they remain legally in office and must fully co-operate with and assist the liquidator as required under Sections 177–178 of the Act. In line with Section 174(1)(b) of the Act, upon the commencement of liquidation, the directors and other officers of the company retain their position but no longer have any powers, functions or duties, except those expressly required or authorised by the liquidator or permitted under the Act.

In personal insolvency matters, a bankruptcy trustee (Sections 321, 340–345) is appointed – either the official receiver or a licensed insolvency practitioner – to administer the bankrupt’s estate. The bankruptcy trustee collects, manages and distributes the bankrupt’s assets and reports to both the High Court and the creditors. Trustees may be appointed by the Court or elected by creditors, and they can be removed for cause or conflict of interest.

Finally, creditors’ committees (Sections 436–444) consist of three to five members elected by creditors to oversee and consult with administrators, liquidators or trustees. These committees provide an additional layer of accountability by reviewing reports, monitoring the conduct of office holders and safeguarding transparency in the administration of the insolvency process.

The Act establishes a clear statutory hierarchy for the payment of creditors in both company liquidations and personal bankruptcies.

Secured creditors (Sections 210–213 and 354–357) have priority over the assets subject to their security and may either realise or surrender their security. If they surrender the security, they may claim the full debt as unsecured; if they realise it and a shortfall remains, they may claim the deficiency as an unsecured debt.

Estate and administrative expenses (Sections 206(1)(a) and 350(1)(a)), including the costs of the insolvency, remuneration of the liquidator or trustee, and other necessary expenses are paid next from the general estate.

Preferential creditors (Sections 206(1)(b) and 350(1)(b)) follow. These include employee wages, certain taxes and statutory contributions, which rank ahead of floating charge holders (Section 207).

Unsecured creditors (Sections 206(1)(c) and 350(1)(c)) share equally in remaining assets once higher-ranking debts are settled.

Subordinated and deferred creditors (Sections 150 and 351) are paid only after all other debts and liabilities have been satisfied. This includes claims by unsecured creditors. Such subordination arises either from contractual agreement under Section 150 or from statutory deferral, as provided in Section 351 for certain debts in bankruptcy.

Finally, post-insolvency interest and any surplus (Sections 214 and 358) are distributed to creditors proportionally, and any balance is returned to members or the bankrupt’s estate.

The Act establishes a clear order of priority claims in restructuring and insolvency proceedings, balancing administrative needs, social protection and creditor rights.

• New-money and administration liabilities (Section 96(1)(a)): Debts or liabilities incurred by an administrator during the course of administration, such as new financing, rent or essential operational costs, rank as first-priority expenses. These claims are secured by a first-ranking charge over company assets and take precedence over all other claims except fixed-charge security (Sections 96(2)–(3)).
• Practitioner fees and administration expenses: The remuneration and expenses of administrators, liquidators, trustees and receivers rank immediately after new-money claims under Section 96(1)(b) and Sections 446–448. Administrative and estate expenses, as outlined in Sections 206(1)(a) and 350(1)(a), must be paid before any creditor distributions.
• Employee and tax claims: Employee wages pensions, and statutory taxes are preferential debts under Sections 206(1)(b) and 350(1)(b). They rank after administrative expenses but ahead of floating charge holders, in accordance with Section 207.
• Lease liabilities: Rent and other obligations arising under leases or contracts adopted by an administrator are treated as administration expenses under Section 96(1)(a), ensuring landlords and suppliers are paid on a priority basis.

Secured creditors in Belize may create and enforce a wide range of security interests over both tangible and intangible property. The Act, together with general commercial and property law, recognises both traditional and modern forms of collateral, ensuring effective protection and enforcement mechanisms for secured lending.

Secured creditors may take fixed or floating charges, mortgages, pledges or collateral arrangements over various classes of assets. A fixed charge may attach to specific property such as real estate, buildings, vessels, machinery, equity shares or intellectual property. A floating charge may cover circulating assets such as inventory, receivables or cash that fluctuate during the company’s operations (Section 95).

In addition, Part XII (Sections 299–340) recognises collateral and title-transfer arrangements over financial instruments, securities and accounts, allowing lenders to hold or control assets as security without the need for formal transfer of ownership.

Outside a restructuring or insolvency proceeding, secured creditors retain full contractual and statutory rights to enforce their security. Under Section 174(2) of the Act, the commencement of liquidation does not affect a secured creditor’s right to take possession of, realise or otherwise deal with secured assets.

Secured creditors may:

• take possession and sell or auction collateral to recover debts;
• appoint a receiver under a debenture or security instrument to manage or dispose of the secured property; and
• apply proceeds to satisfy the secured debt, returning any surplus to the debtor or liquidator in accordance with Sections 212(1) and 356(1).

If enforcement proceeds are insufficient, the creditor may claim the deficiency as an unsecured debt (Sections 212(2)(b) and 356(2)(b)).

Unsecured (trade) creditors in Belize retain several enforcement rights and contractual protections outside a restructuring or insolvency proceeding. These remedies are governed by both the Act and general commercial law.

As it relates to “pre-judgment attachments and execution rights”, unsecured creditors may enforce debts through court proceedings and execution against a debtor’s assets. Under Section 367(1), creditors may retain the benefit of an execution or attachment only if it is completed before bankruptcy or liquidation begins. Completion occurs when goods are seized and sold, land is taken under execution or an attached debt is received (Section 367(5)).

Suppliers may protect their position through retention of title (ROT) clauses, retaining ownership of goods until full payment. Section 84(1)(c)(ii) recognises such agreements, enabling repossession or control over unpaid goods provided they remain identifiable and separate.

Creditors may exercise contractual or equitable set-off to offset mutual debts, consistent with Section 149 of the Act, which also governs statutory set-off in insolvency. This allows trade creditors to reduce exposure before initiating formal recovery proceedings.

The formal requirements for restructuring are set out in the Act. Section 15(1) defines an arrangement as a compromise between a debtor and their creditors, with implementation overseen by a supervisor acting as a trustee or in another capacity. Under Section 20(1), a company’s board may only make a proposal for an arrangement if the company is insolvent or is likely to become insolvent.

In relation to the simplified debt restructuring programme, discussed at 1.2 Types of Insolvency, Section 285(1) permits a company to apply to the official receiver for acceptance into the programme at any time, in accordance with the procedure prescribed in Schedule V. These provisions confirm that a formal written proposal, and in the case of the simplified process, an application to the official receiver, are mandatory procedural steps before any restructuring may commence under the Act.

The Act does not require prior consensual negotiations before a formal statutory process begins. Instead, Section 15(1) permits the debtor to directly propose a compromise, while Section 285(1) allows a company to voluntarily apply for the simplified debt restructuring programme “at any time”. Once the process starts, the relationship between the debtor and creditors is defined through supervised negotiation. Section 292(a)–(b) outlines the role of the restructuring advisor, who assists the company in formulating a proposed compromise and then help the company seek agreement from its creditors. According to Section 2(1), the supervisor is the person responsible for supervising the implementation of an arrangement or bankruptcy, acting as a trustee or otherwise. Thus, the restructuring advisor or supervisor acts as a crucial intermediary managing the negotiation process.

A key feature of the statutory process is its binding nature once an arrangement is approved. Section 34(1) stipulates that once sanctioned, the arrangement is binding on the company, its members and each creditor, treating them as if they were a party to the agreement. Similarly, in simplified restructuring, Section 293(2) states that if the arrangement is approved by an order of the High Court, the compromise becomes binding on the company and the relevant creditors or class of creditors. Consequently, dissenting creditors are legally bound by the arrangement once it has received the necessary approval.

Although the Act does not impose an explicit legal duty to co-operate during negotiations, it does provide for sanctions against obstructive conduct and implies a requirement for good faith. Section 292(c) authorises the restructuring advisor to help the company respond to any query from the High Court regarding the feasibility of the proposal, suggesting an underlying duty of good faith.

Furthermore, Section 284(6) offers protection to qualified persons, stating that they face no liability for anything done or omitted in good faith and with reasonable care while discharging their functions. According to Section 2(1) of the Act, a qualified person means a person who has the qualification prescribed by regulations made under the Act to act as an insolvency practitioner, supervisor, trustee, liquidator or administrator. This provision indicates that while co-operation is not explicitly mandated, stakeholders must act in good faith and can only be held liable if their non-cooperation amounts to bad faith or negligence.

The Act sets out the legal framework for out-of-court restructuring in Part II – Creditors’ Arrangements, and Part XI – Simplified Restructuring of Debts.

Section 15(1) of the Act provides that “an arrangement is a compromise between a debtor and its or his creditors, the implementation of which is supervised by a supervisor acting as a trustee or otherwise”. This defines the restructuring as a contractual compromise between a debtor and its creditors, but with statutory supervision and enforceability under the Act.

Under Section 43(1) of the Act, where a proposal is approved at a creditors’ meeting, the arrangement is binding on the company and on each member and each creditor of the company as if he or she was a party to the arrangement.

However, where a proposal is approved by a creditors’ meeting, the arrangement is binding on the debtor and on every creditor of the debtor, whether or not he or she was present or represented at the meeting, as if he or she were a party to the arrangement (Section 62).

Once the creditors approve the proposal, the following applies:

• the arrangement binds all creditors, whether they voted for or against it, or even if they did not attend the meeting;
• it also binds the debtor (company or individual) and, in the case of a company, its members; and
• dissenting or absent creditors cannot later challenge or opt out of the arrangement except on limited grounds (such as unfair prejudice or material irregularity, under Sections 43 and 72).

However, there are limits to the binding effect regarding secured and preferential creditors, unless they consent in writing. According to Section 15(4) of the Act, an arrangement shall not, except with the written agreement of the secured creditor or the preferential creditor concerned:

• affect the right of a secured creditor of the debtor to enforce his or her security interest or vary liability secured by the security interest; or
• result in a preferential creditor receiving less than he or she would receive in a liquidation or bankruptcy of the debtor had it commenced at the time approved by the arrangement.

Secured and preferential creditors are not automatically bound by an arrangement unless they explicitly agree.

Although a creditors’ arrangement is negotiated and approved outside formal liquidation or bankruptcy, it acquires statutory effect once filed and recognised under the Act. For example:

• Section 33 of the Act requires the supervisor to file notice of appointment with the registrar (giving the arrangement official status); and
• Section 42 of the Act allows applications to the High Court “where an arrangement is approved or modified”, thus demonstrating that disputes or enforcement issues fall under judicial oversight.

Under Section 20 of the Act, the board of a company, other than a company that is in liquidation or in administration, may propose an arrangement and nominate an interim supervisor to act in relation to the proposed arrangement if the following apply.

• It believes on reasonable grounds that the company is insolvent or is likely to become insolvent.
• It has passed a resolution:
1. stating its belief that the company is insolvent or is likely to become insolvent;
2. approving a written proposal containing the information prescribed; and
3. nominating an eligible insolvency practitioner to be appointed as interim supervisor.

The decision to file rests entirely with the company's board, as they are not legally obligated to do so, even in the face of likely insolvency.

Where a company is in administration or liquidation, the administrator or liquidator may make a proposal and appoint another eligible insolvency practitioner as the interim supervisor (Section 22(1))). Therefore, the procedure may also be initiated by an administrator or liquidator who is acting on behalf of a company currently subject to formal proceedings.

Concerning an individual creditor’s arrangement, a debtor who intends to make a proposal for an arrangement with his or her creditors “shall nominate an eligible insolvency practitioner to act as interim supervisor for the purpose of the proposal” (Section 47(1)(a)).

Under the Act, an insolvent individual can choose to initiate an out-of-court restructuring, as there is no mandatory filing requirement.

As it relates to the formal and material criteria for initiating the procedure, Section 20(1)(a) requires that the company “believes on reasonable grounds that the company is insolvent or is likely to become insolvent”.

For companies, the process begins with a board resolution, as required under Section 20(1)(b), with such resolution stating its belief that the company is insolvent or is likely to become insolvent. The resolution should approve a written proposal containing the information prescribed, and it should nominate an eligible insolvency practitioner to be appointed as interim supervisor (Section 20(1)(b)).

Where the board of the company has passed a resolution, it is required to provide the nominated insolvency practitioner with the following:

• a copy of the resolution passed;
• a copy of the proposal approved by the board;
• a statement of affairs made up to a date no earlier than two weeks prior to the date of the resolution; and
• a notice of intention to appoint the nominated insolvency practitioner as interim supervisor.

Eligible debtors may be subject to the procedure for creditors’ arrangement. Section 14(1) defines a debtor as “a company or individual proposing an arrangement”.

However, Section 19(2) of the Act provides an explicit limitation, which applies to foreign companies. A foreign company may not propose or enter into an arrangement.

There are two principal restructuring mechanisms: the creditors’ arrangement (Part II) and the simplified debt restructuring programme (Part XI). Both allow financially distressed debtors to compromise with creditors under court supervision while maintaining business continuity.

Restructuring may affect the rights of members, secured and unsecured creditors, and contractual counterparties. Under Section 15, an arrangement may cancel, reduce or vary debts or contractual obligations. Secured and preferential creditors are only bound with their written consent.

The Act does not expressly provide for third-party releases. Guarantors, directors and group companies may only be released with creditor consent or court approval in exceptional circumstances.

Creditors are grouped into classes (secured, preferential, and unsecured) under Section 293(4). Approval requires a two-thirds majority in value of each class. Related-party votes are excluded unless permitted by the court.

Creditor claims are verified through disclosures filed with the restructuring proposal, and the High Court may assess or adjust claim values to ensure fairness (Section 293(5)).

Upon acceptance into the simplified debt restructuring programme, a statutory moratorium applies (Section 291), preventing liquidation, enforcement or execution without leave of the court. A restructuring advisor appointed by the official receiver (Section 284) assists the debtor in preparing and negotiating the plan.

Once approved by the required majority and sanctioned by the High Court, the arrangement binds all creditors within that class, including dissenters (Section 293(2)). This mechanism operates as a limited cross-class cram-down.

The High Court may authorise new financing or security during restructuring where necessary to preserve the business, provided creditor rights are not unfairly prejudiced.

While the Act recognises arbitration of ancillary disputes (Schedule I, paragraph 6), statutory restructuring proceedings remain court-supervised.

Simplified debt restructurings follow an expedited process, which is a 21-day creditor notice period (Section 287(4)) followed by a 90-day moratorium, extendable once by 30 days (Section 296).

A statutory restructuring under the Act may conclude in several ways, depending on whether a compromise is approved or rejected, or the process lapses.

Under Section 296(1), a company is automatically discharged from the simplified debt restructuring programme after 90 days from the publication of its acceptance notice, unless extended once by up to 30 days (Section 296(3)). The procedure also ends earlier if an application for court approval of a compromise under Section 293(1) is granted, dismissed or withdrawn (Section 296(5)).

The High Court must approve any compromise or arrangement. It will not sanction a proposal unless satisfied that:

• creditors have received adequate disclosure of material information;
• statutory notice and objection procedures were followed; and
• the proposal meets the “threshold requirement” – ie, at least two-thirds in value of creditors in each class support the plan (Section 293(3)(d)).

The Court may also reclassify creditors to ensure that the result is “fair and equitable” (Section 293(5)), thereby applying a substantive fairness test before confirmation.

The official receiver may discharge a company from the programme before expiry if:

• eligibility criteria were not met at acceptance;
• false or misleading information was provided;
• the debtor or its officers failed to co-operate with the restructuring advisor;
• creditor support is insufficient to meet statutory thresholds; or
• the company is otherwise unsuitable (Section 296(7)).

Failure by the debtor or creditors to observe an approved compromise constitutes a breach enforceable by court application. The court may enforce, vary, or set aside the arrangement and may authorise further insolvency proceedings if default persists.

The Act clearly defines the consequences for a debtor’s position and role upon initiating a statutory restructuring or insolvency procedure, primarily through the provisions governing Creditors’ Arrangements (Part II) and Administration (Part III).

Following an administration order, the debtor company may continue to operate, but its management authority is transferred. Section 92(1) specifies that the administrator acts as the agent of the company, and Schedule I, paragraph 12 grants the administrator the explicit power to carry on the business. Consequently, the administrator assumes control of all operations, and the directors’ powers are suspended to the extent required to meet the administration’s objectives.

Upon commencement of administration, the debtor immediately loses control over its assets. Section 80 states that an administration order suspends any resolution for winding up and transfers control of the company to the administrator. Furthermore, Section 84(1) strictly prohibits any person from taking possession of or exercising control over any company asset without the administrator’s consent or the leave of the High Court. The administrator is also authorised under Section 85(1) to dispose of perishable assets during the moratorium and is generally empowered (Schedule I, paragraph 2) to sell, charge or otherwise dispose of assets. The debtor’s use of its assets is therefore heavily restricted, requiring the supervision or approval of the administrator or the High Court.

The company may seek new financing during administration. The administrator has the power to borrow money, whether that borrowing is secured against the company’s assets or unsecured (Schedule I, paragraph 3). This means that new financing or borrowing is permissible, provided it is initiated through or with the authority of the administrator, who must act in the best interest of the creditors and under any necessary oversight from the High Court.

Under the Act, the principal office holders in restructuring and insolvency proceedings are the supervisor, administrator, receiver, liquidator, bankruptcy trustee and official receiver, with each acting as an officer of the High Court with defined statutory powers and fiduciary duties.

The supervisor must take possession of assets under the arrangement, keep accounting records and file periodic reports. The supervisor manages implementation of the restructuring plan until its completion or termination (Sections 35–37).

The administrator must “take into his custody or under his control the assets” of the company and manage its affairs as “an officer of the High Court” (Section 86). Under Schedule I, the administrator may:

• manage the business;
• remove directors;
• dispose of assets;
• borrow funds; and
• apply to the Court for directions.

The receiver acts as the company’s agent and must “exercise his powers in good faith and for a proper purpose” (Sections 125(1) and 127(1)). Powers include collecting income, managing and insuring assets, and realising secured property (Section 126).

The liquidator is “an officer of the High Court and agent of the company” whose duties include taking possession, protecting, and realising assets, and distributing proceeds to creditors (Sections 183–184). Schedule II authorises powers such as borrowing, selling property and compromising debts.

The bankruptcy trustee’s duties are to take possession of and realise the bankrupt’s estate and distribute proceeds. With Court or creditors’ committee approval, trustees may exercise powers in Schedule IV, including carrying on business and mortgaging property (Sections 339–340).

The official receiver is “an officer of the High Court” who may act as liquidator, trustee, receiver or supervisor and must follow the Court’s directions (Sections 503–504).

Under the Act, creditors and members retain defined rights during restructuring, subject to a statutory moratorium and court supervision.

Creditors are grouped by class – ie, secured, preferential or unsecured (Section 293(4)). Each class votes separately, and approval requires a two-thirds majority in value and High Court confirmation (Section 293(3)(d)). Members have limited participation and vote only if directly affected.

On commencement of the simplified debt restructuring programme, an automatic moratorium suspends enforcement, execution, repossession and lease termination unless authorised by the High Court (Section 291(1)(b)–(f)).

Lawful set-off and netting arrangements remain valid under section 298(2), but other enforcement rights are deferred during the stay.

Creditors may object within 21 days (Section 287(3)) or challenge court approval but cannot block proceedings once statutory thresholds are met. The Court may reclassify creditors to ensure fairness (Section 293(5)).

Members rank last and may retain equity only if all creditor claims are satisfied or if the restructuring plan expressly allows it (Section 293(2)).

The Act provides three main procedures:

• simplified debt restructuring;
• administration; and
• bankruptcy.

All of these procedures are applicable to both corporate and individual debtors, depending on eligibility.

Simplified debt restructuring (Sections 283–288) is designed for small companies with turnover and liabilities under BZD1 million (Schedule VI). A simplified debt restructuring, discussed at 1.2 Types of Insolvency and 3.1 Out-of-Court Restructuring Process, is initiated by company resolution submitted to the official receiver.

The eligibility requirement is set out in section 286 and Schedule VII of the Act, if the company is already in liquidation or receivership it will be ineligible.

The process involves the official receiver, with a restructuring advisor, reviewing eligibility. Creditors may object within 21 days (Section 287(3)).

Administration (Sections 75–77) is available to companies that are or are likely to become insolvent, where there is a reasonable prospect of rescue. Administration is initiated by the company, its board, a creditor, a supervisor of an arrangement or the FSC. The effect of administration is that the High Court appoints an administrator to manage affairs and protect assets.

Bankruptcy (Sections 306–312) applies to individuals unable to pay their debts. It is initiated by the debtor or any creditor. The criteria are that the High Court must find the debtor insolvent on a balance sheet or cash-flow basis.

The commencement of restructuring or insolvency proceedings under the Act occurs when a formal application or resolution is accepted or a Court order is made. This constitutes the triggering event that activates statutory moratoria, transfers management powers, and subjects the debtor to court or official supervision.

Once a restructuring or insolvency procedure begins, control of the debtor’s assets and operations generally transfers to an appointed administrator (corporate entities) or trustee (individuals). Directors remain in office but may only act with the administrator’s written consent (Section 86(4)–(5)). A statutory moratorium applies, preventing enforcement, repossession or execution without High Court approval.

Administrators act as officers of the High Court and assume control of the company’s business, assets and affairs to preserve value and achieve the objectives of administration (Section 86(2)–(3)). They may remove or appoint directors, dispose of assets and manage operations (Section 89, Schedule I).

Trustees in bankruptcy act similarly for individuals, collecting and realising the estate and distributing proceeds to creditors (Section 340–341).

A creditors’ committee, where established, consults with and monitors the office holder but cannot issue binding directions (Sections 438–443).

Office holders must act impartially, prioritising creditors’ collective interests.

Pre-insolvency contracts remain enforceable unless disclaimed or modified by court order. Administrators may apply to dispose of assets subject to security or retention-of-title agreements with notice to affected parties (Section 91). Financial contracts and netting agreements remain enforceable, unaffected by moratoria (Sections 301–303).

While arbitration clauses in commercial contracts remain valid, core insolvency proceedings must be conducted before the High Court, which retains supervisory jurisdiction. Arbitration may only address discrete contractual disputes ancillary to the insolvency (Schedule I; Section 293(5)).

The High Court may issue an order terminating the liquidation if it considers it just and equitable to do so under Section 232(1).

This may occur in situations where:

• the company has settled its debts and there is no longer a need for liquidation;
• the liquidation was commenced in error or under circumstances that no longer exist; or
• the continuation of liquidation would serve no beneficial purpose to creditors or members.

Pursuant to Section 232(2), an application for termination can be made by:

• the liquidator;
• a creditor;
• a director;
• a member of the company; or
• the official receiver.

Before making the order, the Court may require the liquidator to submit a report on relevant matters (Section 232(3)).

The Court may also impose terms, conditions or supplemental directions relating to the termination (Section 232(4)).

Once the Court issues the order, the company ceases to be in liquidation, and the liquidator’s appointment is terminated on the date specified in the order (Section 232(5)). The applicant must then file a sealed copy of the order with the registrar within ten days, failure of which constitutes an offence (Sections 232(6)–(7)).

The liquidation may also conclude when the liquidator files a certificate of compliance confirming that the requirements under Section 233(2) (relating to the completion of winding up) have been met.

This typically occurs where:

• the liquidator has realised all assets of the company;
• all creditors have been paid according to priority;
• any remaining surplus has been distributed to members (if applicable); and
• the final accounts have been prepared and filed.

If the High Court has modified the requirements of Section 233(2) under Section 233(4), the certificate must reflect those modifications. Once filed, the liquidation is deemed complete and terminated.

In cases where full compliance with Section 233(2) is impractical or unnecessary, the High Court may issue an order under Section 233(4) exempting the liquidator from those requirements.

Such exemption may be granted:

• when insufficient funds remain to pay all creditors in full, making further administration futile; or
• when the assets have been fully realised, but procedural formalities cannot be satisfied.

Upon issuance of the exemption order, the liquidation terminates on the date specified by the Court.

Under the Act, the rights of members, secured creditors and unsecured creditors in an insolvency context are governed by a structured hierarchy that balances enforcement rights with the need to preserve estate value and equitable treatment.

Secured creditors retain their proprietary rights over charged assets despite the commencement of insolvency proceedings. Section 174(2) expressly preserves their right to take possession of and realise secured assets. They may:

• value their security and claim for any shortfall as unsecured creditors (Sections 210(1)(a) and 354(1)(a)); or
• surrender their security for the general benefit of creditors and claim for the full debt (Sections 210(1)(b) and 354(1)(b)).

Liquidators or trustees may redeem secured property at the creditor’s stated value, subject to notice and judicial oversight (Sections 211 and 355). Secured creditors must account for any surplus upon realisation (Sections 212 and 356).

Unsecured creditors must lodge written claims for admission (Section 208). Once liquidation commences, they are stayed from initiating or continuing actions against the company or its assets (Section 174(1)(c)), but may prove for debts in accordance with statutory priorities (Sections 206–209). They cannot enforce attachments or executions commenced pre-insolvency unless completed prior to liquidation (Section 175).

Members’ rights are residual. Under Section 194, members’ liability is limited to unpaid share capital or contractual undertakings. They cannot claim dividends or other distributions until all creditors are satisfied (Section 196). Past members within one year of liquidation may remain liable for unpaid contributions (Section 195).

An automatic stay arises upon commencement of liquidation or bankruptcy, suspending enforcement actions and legal proceedings without court leave (Sections 174(1)(c) and 328(3)). However, secured creditors’ enforcement rights are exempt from the stay. Insolvency set-off applies automatically under Section 149, while ROT clauses remain valid subject to good faith and ordinary-course limitations (Section 84).

Creditors cannot frustrate insolvency proceedings. However, they may challenge decisions or valuations through court application (Sections 210(3)–(5) and 354(3)–(5)).

The Act does not expressly authorise third-party or non-debtor releases outside approved arrangements or compositions, preserving the general principle that only the debtor’s liabilities are discharged through insolvency.

The principal source of international restructuring and insolvency law in Belize is Part XVIII (Cross-Border Insolvency) of the Act. This Part is modelled closely on the UNCITRAL Model Law on Cross-Border Insolvency, providing a framework for co-operation, recognition and co-ordination between Belizean courts and foreign jurisdictions.

The objectives include (Section 450):

• co-operation between Belize’s High Court and foreign courts or insolvency administrators;
• legal certainty for international trade and investment;
• fair and efficient administration of cross-border insolvencies; and
• protection of creditors and facilitation of business rescue.

Key statutory provisions and standards include:

• Section 451, which defines key terms such as “foreign main proceeding”, “foreign ancillary proceeding” and “foreign representative”;
• Section 452, which affirms that Belize’s international treaty obligations prevail in case of conflict with domestic law;
• Section 453, which establishes a public policy exception, allowing the High Court to refuse actions contrary to Belizean law or interests;
• Sections 462–468, which govern recognition of foreign proceedings and the relief available upon recognition; and
• Sections 472–474, which mandate direct co-operation and communication between Belizean and foreign courts or representatives.

Part XIX (Orders in Aid of Foreign Proceedings) of the Act supplements Part XVIII by allowing the High Court to grant assistance to foreign representatives where appropriate.

The jurisdiction to commence a restructuring or insolvency proceeding in Belize is based on the debtor’s connection to the jurisdiction, primarily through its centre of main interests (COMI), establishment or assets located within Belize.

The High Court of Belize has authority to open insolvency or restructuring proceedings where the debtor is registered, domiciled or carries on business in Belize. Jurisdiction also exists if the debtor holds property or conducts economic activity within the country.

Under Part XVIII (Sections 450–478), a foreign proceeding is recognised as a foreign main proceeding if it takes place in the country where the debtor has its COMI, or as a foreign non-main proceeding if the debtor maintains an establishment there (Sections 451(1) and 463(3)). The High Court determines the COMI based on the debtor’s registered office, habitual residence or principal place of business, unless proven otherwise.

A foreign representative may apply for recognition under Section 462, and upon verification that the proceeding qualifies as a main or non-main proceeding, the High Court may grant recognition and co-ordinate cross-border co-operation (Sections 463–464).

In Belize, the Act governs all restructuring and insolvency proceedings commenced within its jurisdiction. Also, the Act provides a comprehensive domestic framework regulating administration, receivership, liquidation, bankruptcy and restructuring processes.

Proceedings initiated in Belize are conducted entirely under the Act and related local statutes such as the Companies Act, Financial Services Commission Act and Security Interest in Movable Property Act. This includes the appointment of insolvency practitioners, recognition and ranking of claims, distribution of assets, and the rights and obligations of creditors and debtors.

Under Part XVIII (Sections 450–478), the High Court may recognise and co-operate with foreign insolvency proceedings. However, the law of Belize applies to all property and transactions within its territory. Section 452 of the Act gives effect to international treaties where applicable, while Section 453 allows the Court to refuse recognition or assistance if doing so would contravene Belizean public policy.

Moreover, in cross-border matters, the High Court may, under Section 481(5) of the Act, apply either Belizean law or the law governing the foreign proceeding to ensure fairness and consistency, provided it aligns with domestic insolvency principles.

Belize recognises and enforces foreign restructuring and insolvency proceedings through court-approved recognition and orders in aid, provided the proceedings meet statutory definitions and respect domestic legal principles.

Under Part XVIII (Sections 450–478) of the Act, Belize formally recognises foreign insolvency and restructuring proceedings. A foreign representative may apply to the High Court for recognition of a foreign proceeding under Section 462. Recognition is granted if the proceeding qualifies as a foreign proceeding (defined in Section 451) and does not conflict with Belize’s public policy (Section 453). The Court may recognise it as a foreign main proceeding (where the debtor’s main interests are located) or a foreign non-main proceeding, and once recognised, may stay actions, protect assets or co-ordinate with foreign courts (Sections 464–468 and 472–474).

Foreign judgments and orders can be enforced under Part XIX (Sections 479–483). A foreign representative from a recognised jurisdiction may apply to the High Court for an order in aid of a foreign proceeding (Section 480). The Court will enforce such orders if they are consistent with Belizean law, ensure fair treatment of creditors and do not contravene public policy (Section 481).

Under Section 476 of the Act, the courts in Belize actively promote judicial co-operation and co-ordination with foreign courts and insolvency office holders in cross-border insolvency matters.

Section 476 provides a detailed framework ensuring that, when a foreign proceeding and a Belize insolvency proceeding occur concurrently regarding the same debtor, the High Court must seek co-operation and co-ordination in accordance with:

• Section 472 – co-operation and direct communication between the High Court and foreign courts or foreign representatives;
• Section 473 – co-operation and direct communication between the insolvency administrator and foreign courts or representatives; and
• Section 474 – permissible forms of co-operation.

When a Belize proceeding and a foreign proceeding are ongoing simultaneously:

• any relief granted under Section 466 (interim relief) or 468 (relief upon recognition of a foreign proceeding) must be consistent with the Belize insolvency process;
• if the foreign proceeding is recognised as a foreign main proceeding, Section 467 (effect of recognition) will not apply to the extent it conflicts with the Belize proceeding; and
• if the Belize proceeding begins after recognition of a foreign proceeding, any relief previously granted must be reviewed, modified or terminated if inconsistent with the local process.

If more than one foreign proceeding exists for the same debtor, the High Court must again seek co-ordination under Sections 472–474 of the Act. The Court ensures that:

• relief granted to a foreign ancillary proceeding is consistent with a recognised foreign main proceeding;
• where a foreign main proceeding is later recognised, previously granted relief is reviewed and adjusted for consistency; and
• in the case of multiple foreign ancillary proceedings, the Court must grant, modify or terminate relief to facilitate effective co-ordination of all related proceedings.

Foreign creditors are treated on substantially the same footing as domestic creditors, but certain procedural and notification safeguards apply to ensure cross-border transparency and co-ordination. The Act is designed to comply with modern international standards, specifically Part XVIII (Cross-Border Insolvency) and Part XIX (Orders in Aid of Foreign Proceedings).

Section 460 of the Act provides that foreign creditors shall have the same rights regarding the commencement of, and participation in, a Belize insolvency proceeding as Belize creditors.

This establishes non-discrimination; foreign creditors may file claims, attend meetings and receive distributions on the same basis as local creditors. There are no additional registration or residency requirements for claim recognition.

Section 478 of the Act is a cross-border fairness rule that prevents a creditor who has already received a payment in a foreign insolvency proceeding from claiming the same debt again in Belize until other creditors of the same class have caught up proportionately.

It preserves the pari passu principle, whereby creditors of equal ranking must be treated equally and share distributions in proportion to the size of their claims across international proceedings involving the same debtor.

Section 461 of the Act is a cross-border due process safeguard. It ensures that foreign creditors, that is, creditors located outside Belize, receive timely and adequate notice of any insolvency proceedings commenced in Belize that could affect their rights.

Under the Act, directors’ duties are set out in law and go beyond normal management responsibilities once a company starts showing signs of financial trouble.

When a company is financially healthy, directors are expected to act honestly, in good faith and in the best interests of the company as a whole. This usually means focusing on members’ interests, but they should also consider employees, creditors and the wider community where relevant.

However, once the company becomes financially distressed, when directors know or should know that insolvency is likely, their responsibilities shift under Section 248(1) of the Act. From that point, directors must act mainly in the interests of creditors and take reasonable steps to limit losses. If they continue trading recklessly or take on new debts knowing the company cannot recover, they risk personal liability for insolvent trading.

In addition, Sections 246 and 247 of the Act make directors and officers personally liable for misfeasance, breach of duty or fraudulent trading, allowing the High Court to order repayment or compensation.

Failure to uphold these duties can also lead to disqualification from managing any company for up to ten years under Sections 254–256, particularly where a director’s actions worsen the company’s financial position or breach legal obligations.

Directors can be held personally liable for losses arising from misconduct, breach of duty or trading while insolvent. Liability is determined individually based on each director’s conduct, rather than collectively by the entire board.

Directors can face personal liability for actions taken before a company’s collapse under several provisions:

• misfeasance or breach of duty (Section 246) – a director can be ordered to repay or compensate the company if they misapply company property, breach fiduciary duties or act negligently;
• fraudulent trading (Section 247) – any person who knowingly carries on business with the intent to defraud creditors (or for any fraudulent purpose) can be made personally responsible for contributing to the company’s assets;
• wrongful (insolvent) trading (Section 248) – a director may be held personally liable if they knew, or should have known, that there was no reasonable prospect of avoiding insolvency and failed to take reasonable steps to minimise the resulting losses to creditors; and
• unfitness and disqualification (Sections 252–255) – directors who trade irresponsibly, fail to comply with company law or engage in other conduct making them unfit can be disqualified from acting as a director for up to ten years and may, in certain cases, be held financially responsible for the losses caused.

Only the appointed office holder (ie, the liquidator, administrator or trustee) is authorised to bring claims against directors (as specified in Sections 246(1), 247(1) and 248(1)).

Individual creditors cannot sue directors directly; only the office holder can pursue these claims collectively on behalf of the company. This process ensures that any recovered funds are equitably distributed among all creditors, rather than allowing individual creditors to compete for separate recoveries.

Misconduct that can lead to a director’s personal liability includes making selective or preferential payments to certain creditors just before insolvency, continuing to trade or take on new debts while the company is insolvent, misusing company funds or assets and failing to maintain proper accounting records or co-operate with insolvency officials.

Under the Act, company officers, including directors and senior managers, have a duty to act honestly, in good faith, and in the best interests of creditors once a company becomes financially distressed or insolvent. Their powers become limited, and they must co-operate fully with the administrator or liquidator (Sections 86(4) and 174(1)(b)).

Officers can be held personally liable on several grounds:

• misfeasance or breach of duty (Section 246) – if they misuse company property, breach fiduciary duties or fail to act with due care, the court can order them to repay or compensate the company;
• fraudulent trading (Section 247) – if they knowingly carry on business to defraud creditors, they can be required to contribute personally to the company’s assets;
• insolvent or wrongful trading (Section 248) – if they continue trading when they knew, or should have known, the company could not avoid insolvency, they can be personally liable for resulting losses;
• unfitness or disqualification (Sections 252–255) – directors whose conduct makes them unfit may be disqualified by the High Court for up to ten years; and
• fraudulent conduct offences (Section 281) – serious misconduct can lead to criminal prosecution in addition to civil penalties.

Under the Act, directors face both civil and criminal liabilities for misconduct or mismanagement related to an insolvent company.

Under Part IX (Sections 251–263), the official receiver may apply to the High Court for a disqualification order against a director, voluntary liquidator or receiver whose conduct makes them unfit to manage a company.

A disqualification order (Sections 252–254) prevents the person from acting as a director or taking part in the management, formation or promotion of a company for up to ten years. Grounds include fraud, misfeasance, breach of duty, and causing or permitting the company to trade wrongfully or incur debts while insolvent (Section 254(1)(c)(i)–(ii)).

The Court may also consider whether the director was responsible for transactions later set aside as voidable, persistent non-compliance with company law or failure to fulfil statutory obligations under the Act (Section 255).

A director can voluntarily agree to a disqualification undertaking instead of a court order (Section 256). Both orders and undertakings have the same effect and can last up to ten years.

If a disqualified person manages a company or acts in any prohibited capacity without court permission, they:

• commit an offence (Section 259); and
• incur personal liability for the company’s debts incurred during that period (Section 260(1)–(2)).

Such a person may also be personally liable if they knowingly act on instructions from another disqualified individual or undischarged bankrupt.

Under Section 263 of the Act, if a liquidator, administrator or administrative receiver finds that a director’s conduct makes them unfit to manage a company, they must report this in writing to the official receiver. This ensures that potential misconduct triggers regulatory or court action.

Sections 247–248 of Act (and referenced in section 250(5)) clarify that civil declarations of liability can be made even if the person is also criminally liable for the same misconduct.

Criminal liability may arise from offences such as:

• fraud in relation to the company;
• misfeasance or breach of fiduciary duty; or
• knowingly carrying on business to defraud creditors.

Transactions such as fraudulent preferences, undervalue transfers or other voidable dealings can be set aside by the High Court if they occurred within certain periods before the start of insolvency proceedings.

Sections 241(1) (for companies) and 421(1) (for individuals) state that the High Court, “on the application of the office holder or bankruptcy trustee”, may make an order setting aside or annulling a transaction. Only an insolvency officeholder, the administrator, liquidator or bankruptcy trustee can bring such claims.

According to Sections 237–240 (companies) and Sections 417–420 (individuals) of the Act, a transaction may be voidable if it:

• was made while the debtor was insolvent or caused insolvency (Sections 236(2) and 416(2));
• gave one creditor an unfair preference over others (Sections 237 and 417);
• was at undervalue, meaning the debtor received little or no consideration (Sections 238 and 418); or
• involved extortionate credit or voidable charges/assignments (Sections 239–240 and 419–420).

Even if the transaction was contractually required or ordered by a court, it can still be voidable (Sections 237(3) and 417(3)).

The relationship between the debtor and the other party matters. Transactions with connected persons (such as relatives, affiliates or directors) are treated more strictly, where:

• there is a presumption that the transaction was not in the ordinary course of business and is therefore voidable (Sections 237(4) and 417(4)); and
• good-faith purchasers or recipients for value are protected and cannot be forced to repay or lose property unless they were parties to the transaction or knew of the insolvency (Sections 242(2)–(4) and 422(2)–(4)).

The Act sets specific timeframes, known as look-back or vulnerability periods, during which certain transactions can be challenged. Under Section 236(1) for companies and Section 416(1) for individuals, transactions made with connected persons can be set aside if they occurred within two years before the onset of insolvency. Transactions involving other, non-connected persons may be challenged if they took place within six months before insolvency. In the case of extortionate credit transactions, the look-back period extends to five years prior to the commencement of insolvency proceedings.

Only the insolvency officeholder, that is, the liquidator, administrator or bankruptcy trustee, can bring a claim to set aside or annul a transaction.

For companies, this is set out in Section 241(1) of the Act, which says that “the High Court, on the application of the office holder, may make an order in respect of a voidable transaction”.

For individuals, Section 421(1) of the Act provides that “the High Court, on the application of the bankruptcy trustee of the individual, may make an order in respect of a voidable transaction”. This means individual creditors cannot file such claims directly; only the appointed insolvency practitioner can.

These avoidance provisions fall under Part VII (Voidable Transactions) for companies and Part XV (Voidable Transactions) for bankrupt individuals. They apply mainly during formal insolvency proceedings such as liquidation or bankruptcy, not during creditors’ arrangements or simplified debt restructuring under Part XI.

If a claim succeeds, Section 241(2) (for companies) and Section 421(2) (for individuals) empower the High Court to:

• cancel or reverse the transaction;
• order repayment or return of property to the liquidator or trustee; and
• restore the position to what it would have been if the transaction had not occurred.

The recovered property or money becomes part of the insolvency estate, to be distributed among all creditors according to statutory priority – not returned directly to the individual who initiated or benefitted from the claim.