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									92   Bermuda

     Chamber of commerce:                               Professional body:
     The Bermuda Chamber of Commerce                    Bermuda Bar Association
     PO Box HM 655                                      PO Box HM 125
     Hamilton HM CX                                     Hamilton HM AX
     Bermuda                                            Bermuda
     Tel:     +1 441 295 4201                           Tel:     +1 441 295 4540
     Fax:     +1 441 292 5779                           Fax:     +1 441 295 9880
     Email: info@                   Email:

     Dialogue underpins Bermuda as                     Majority approval for written resolutions           Funds
                                                       Shareholder written resolutions will be effective   The Investment Funds Act 2006 introduces a
     a dynamic offshore business                       when: (i) notice of resolutions and the resolu-     new regulatory framework for investment
     centre                                            tions have been circulated to all shareholders,     funds. Changes include:
                                                       and (ii) the resolutions are signed by sharehold-   • persons administering funds in or from
     Shaun Morris                                      ers who represent the majority of votes, as             Bermuda must be licensed;
     Appleby                                           would be required if the resolutions had been       • licensed fund administrators are required to
     Hamilton                                          voted on at a general meeting.                          maintain minimum net assets, adequate
                                                                                                               accounting and systems of control of their
     Bermuda’s legislative framework is designed to    Treasury shares                                         business and records, and insurance cover-
     encourage dialogue between the government         The concept of treasury shares was introduced.          age;
     and the business community. Over the years,       These are “issued shares that have been acquired    • the legal definition of an investment fund
     this interaction has yielded fundamental          by the company itself and have not been can-            has been broadened to include partnerships
     reforms to Bermuda’s body of financial services    celled but have been held by the company since          for the first time; and
     and company laws.                                 they were acquired”. Treasury shares are distinct   • with the licensing of fund administrators, a
                                                       from shares that are repurchased for cancella-          new class of funds known as administered
     Companies Act                                     tion.                                                   funds has been created whose level of regu-
     The Companies Amendment Act 2006 is the                                                                   lation is conditional upon the fact that the
     result of a review of the Bermuda Companies       Execution of instruments                                administrator is based in Bermuda and is
     Act 1981. It aims to modernise the Act to take    Companies are now able to execute deeds and             subject to codes of conduct and fund rules.
     account of the various company law reforms in     other instruments that were previously required         Bermuda’s creation of launch-and-list funds
     the UK and elsewhere. Some of the key amend-      to be executed under the company seal, by the       demonstrates its proactive approach to the evo-
     ments are:                                        signature of an authorised person.                  lution of the global fund industry. This option
                                                                                                           permits the establishment of a fund and its
     Electronic delivery of documents                  Appointment of officers                              simultaneous listing on the Bermuda Stock
     Companies may now deliver documents elec-         There is now more flexibility in the ability of a    Exchange. In effect, this provides these vehicles
     tronically, allowing a Bermudan publicly listed   company to appoint officers of any description,      with fast-track approval, representing another
     company, subject to the provisions of its by-     who may or may not be directors.                    positive fund option for clients that might ben-
     laws, to communicate with its shareholders by                                                         efit from listing on the Bermuda Stock
     posting information on a website.                Directors’ authority                                 Exchange.
                                                      The Amendment Act removes any doubt
     Use of secondary names                           about the scope of directors’ authority relative     Partnerships
     Companies may now apply to the Registrar of to that of the shareholders. It explicitly states         The Partnership Amendment Act 2006 pro-
     Companies to register a secondary name. Non- that directors can exercise all of the company’s         vides that a Bermuda partnership may adopt
     roman or non-alphabetic characters (e.g. powers except those required by the                          legal personality. If it elects to do so, the part-
     Chinese characters) are allowed.                 Companies Act or the by-laws to be exercised         nership shall continue even if all the partners die
                                                      by the shareholders.                                 or are declared bankrupt or there is a change in
     Authorised share capital                                                                              its constitution. This election must be made
     A company (other than a mutual fund) may be Fetter of company’s power                                 within 12 months of the Act coming into force
     incorporated with any amount of authorised A company is permitted to agree to fetter its              (August 28 2006) and is irrevocable. Failure to
     share capital. These new provisions do not apply statutory powers (powers reserved for share-         make such an election is final.
     to insurance companies registered under the holders) in the following circumstances: change
     amended Insurance Act 1978, and other com- of name; alteration to the constitutional docu-            Insurance
     panies carrying on business requiring a licence. ments; changes in share capital; removal of          Recent legislation has bolstered the powers of
                                                      directors; long- form amalgamation; and volun-       the Bermuda Monetary Authority (BMA), the
     Unrestricted objects and powers                  tary winding up.                                     independent body which supervises and regu-
     A company may have unrestricted objects and                                                           lates the financial services industry on the
     the capacity and powers of a natural person.                                                          island.                                                                                                                       2010 EDITION
                                                                                             Financial and corporate | Bermuda                                93

    The Insurance Amendment Act 2006                 shore centres like Bermuda have gained               Fulcrum Group – that administers nearly
amends the Insurance Act 1978 and gives the          momentum in the wake of the global financial          $100 billion in assets and is owned jointly by
BMA new powers to supervise and investigate          crisis.                                              Butterfield and fellow fund manager 3i.
persons in the insurance industry, including              The abundance of insurance-related activi-      Appleby represented Fulcrum in the merger.
insurers and insurance managers.                     ty generated annually in Bermuda helps the               Concurrently, Appleby represented De
    The BMA may now give written notice              island counteract the negative image associated      Beers in the $10 million sale of its Bermudian
requiring any person to assist in such an inves-     with other offshore jurisdictions. Over several      subsidiary, Willcroft, to Petra Diamonds, a
tigation by providing such information or doc-       decades the Bermuda government has estab-            growing player in the diamond trade. The
uments that the BMA may reasonably require.          lished information treaties with other nations,      transaction highlights increasing international
These powers do not apply to documents cov-          and the work in fostering these relations has        competition and resulting concentration in
ered by legal professional privilege in proceed-     paid off – the OECD (Organisation for                the diamond mining industry.
ings in Bermuda.                                     Economic Co-operation and Development)                   In keeping with recent trends, Appleby has
    In addition, any person who plans to             has included Bermuda on the so-called white          been engaged on behalf of clients in restructur-
become a 10%, 20%, 33% or 50% controller of          list of co-operative offshore jurisdictions.         ing and insolvency work in addition to its usual
an insurer must give notice to the BMA . The              In June 2009, the government of Bermuda         corporate mandates. February 2008 saw inter-
new definition of a controller includes a man-        signed a TIEA (Tax Information Exchange              national shipping manager Sea Containers
aging director or chief executive of a registered    Agreement) with the Netherlands – the island         emerge from Chapter 11 bankruptcy in the
person. A registered person is defined as any         nation’s 12th such international agreement.          US, and Appleby lawyers represented the
insurance company, insurance manager or              The agreement was the catalyst for Bermuda’s         Bermudan company in the sale of its container
intermediary that is required to register with the   promotion from grey to white, in line with           assets to competitor SeaCo for a total of $462
BMA under the provisions of the act. The             the G20’s 12-agreement quota. This OECD              million. As well as handling matters associated
Insurance Amendment Act also establishes an          re-grading has been backed up by a TIEA              with the transfer of assets, Appleby assisted Sea
appeals process for parties aggrieved by certain     signed with Germany in July, and there are           Containers in the settlement of a $141 million
actions taken by the BMA, including objections       negotiations underway for another agreement          debtor-in-possession (DIP) loan from bond-
to persons becoming controllers.                     between Bermuda and Canada.                          holders Mariner and Dune Capital.
    The new powers are designed to continue               Financial lawyers allude to the unfortunate
the development of Bermuda’s insurance regula-       double punch of the Madoff and Stanford              Leading lawyers
tory framework and the growth of the island’s        Ponzi schemes that victimised many hedge             Cameron Adderley
international business sector. They clearly          funds in Bermuda. As the scope of these oper-        Timothy Counsell
demonstrate Bermuda’s commitment to com-             ations unfolds in US courtrooms, the number          Alex Erskine
petitiveness, ensuring that international best       of victims and the full extent of their losses are   Timothy Faries
practices are adopted and that Bermuda               still uncertain.                                     Shaun Morris
remains a leading offshore financial centre.               A lesser-known but more locally-impact-
                                                     ing scheme involves Thomas Petters of Petters
                                                     Group Worldwide, a fund involved in an               Conyers Dill & Pearman
                                                     alleged Ponzi operation to the tune of $3 bil-       Boasting more corporate lawyers than any
                                                     lion. In Bermuda, the law division of Ernst &        other Bermuda firm, Conyers Dill &
Financial and corporate                              Young is embroiled in a class-action lawsuit         Pearman holds a dominant position within
                                                     undertaken by investors on the basis of the          the island’s corporate services field. The firm
Recommended firms                                     firm’s failure to catch accounting discrepancies      recently added an office in São Paolo, Brazil,
Tier 1                                               in audits performed for investors in Petters’        with a view to developing its business in the
Appleby                                              fund. The case has sent ripples throughout the       lucrative markets of South America. The
Conyers Dill & Pearman                               investment fund community and exposed the            recent establishment of offices in Moscow
                                                     need for law firms to be thorough on matters          and Mauritius brings Conyers’ global pres-
Tier 2                                               of due diligence.                                    ence to 11 locations worldwide.
Attride-Stirling & Woloniecki                                                                                 Clients point out that Conyers’ 81 years
Cox Hallett Wilkinson                                                                                     of experience in Bermuda is a tremendous
Mello Jones & Martin                                 Appleby                                              asset for the firm. As one interviewee says:
                                                     With the opening of its Zurich office in              “They know the ins and outs of Bermuda law
Tier 3                                               December 2008, Appleby has a growing glob-           and have been very helpful in what we need
Marshall Diel & Myers                                al footprint, particularly in the area of private    to get accomplished there.”
Wakefield Quin                                        wealth. Competitors note the firm’s leadership            Among the firm’s corporate transactions
                                                     in Bermuda’s equity markets and affirm their          of recent months was February’s [2009]
The election of Barack Obama as US presi-            respect for managing partner Shaun Morris.           acquisition of insurance broker CastlePoint
dent stirs mixed feelings among Bermudian            “He is one of their most capable attorneys,”         Holdings by Tower Group in a deal valued at
lawyers, with many viewing his aggressive            one rival says. The recent loss of partner James     $490 million, with Conyers representing the
stance on offshore jurisdictions as cause for        Keyes to an in-house position is expected to         seller. In the following month, Conyers
disappointment. “From an emotional stand-            have a noticeable, if short-term, effect on the      advised Xstrata in its rights issue with
point, we were all pleased,” says one practi-        firm’s investment funds practice.                     Glencore International. The transaction saw
tioner, “but his policies are not very Bermuda-          The biggest transaction for Appleby in           English commodities trader Glencore sell its
friendly.” Though regulatory reform is still         recent months was the Butterfield-Fulcrum             interest in four Bermudan assets and its
only theoretical, calls from the G20 nations to      merger in the latter half of 2008. The transac-      Colombian coal operation to Xstrata for $2
enhance transactional transparency in off-           tion created a new entity – Butterfield              billion.

2010 EDITION                                                                                                              
94   Bermuda | Financial and corporate

         In its investment funds practice, Conyers      Cox Hallett Wilkinson
     advised Macquarie Group in the establish-          As one of Bermuda’s leading commercial law
     ment of a Bermudan fund for its partnership        firms, Cox Hallett Wilkinson prides itself on
     with Abu Dhabi Commercial Bank. The fund           offering top-tier corporate services with a
     has already raised $630 million of the $1 bil-     smaller team of attorneys. Competitors note
     lion it expects to invest in infrastructure pro-   that partners Jonathan Betts and Ernest
     jects throughout the Middle East and North         Morrison can be trusted to provide quality
     Africa. The firm is also involved on the side of    representation in matters where a conflict of
     Gottex Fund Management in its share dispute        interest is present.
     with Stewardship Credit Arbitrage Fund                 Prior to the global crisis CHW was already
     before the Supreme Court of Bermuda.               involved in several important debt financing
                                                        projects, including the refinancing of
     Leading lawyers                                    Australian infrastructure firm Babcock &
     Marcello Ausenda                                   Brown Power (BBP) by a syndicate of banks
     John Collis                                        for $2.7 billion. Betts and associate Daniella
     Julie McLean                                       Skotnicki represented BBP in the refinancing
     Anthony Whaley                                     that came at a crucial time for the heavily
                                                        indebted company.
                                                            The firm was involved in several key M&A
     Attride-Stirling & Woloniecki                      transactions in the latter half of 2008, includ-
     Competitors admit Attride-Stirling &               ing its counsel to Sinopec during the Chinese
     Woloniecki is the indisputable leader for          petroleum producer’s acquisition of outstand-
     insurance legal work in Bermuda, particular-       ing shares in Canada’s Tanganyika Oil
     ly in relation to litigation. As one says, “In     Company for $2.1 billion.
     the field of insurance litigation, Attride is a        CHW’s investment funds practice has
     force to be reckoned with.” But this focus         been active with the Australian investment
     comes at a price, and peers note that the          bank Macquarie in recent months, including
     firm’s presence in corporate markets has           the September 2008 launch of Macquarie’s
     diminished in recent times.                        fund with the State Bank of India, MSIF
         Corporate clients praise Attride’s prowess     (Macquarie SBI Infrastructure Fund), to raise
     in relation to department head Neil Horner’s       funds for infrastructure projects in India. As
     work in setting up and advising Bermudan           of April 2009, MSIF had raised an initial cap-
     corporations. “When we made a decision to          italisation of $1 billion.
     go forward, we asked around about the
     process,” says one client. “We came to the         Leading lawyers
     conclusion that Attride, and Neil specifically,    Jonathan Betts
     was very knowledgeable and the best fit for        Ernest Morrison
     us.” Also, the 2008 addition of Federico           Natalie Town
     Candiolo to the funds practice brings a
     wealth of background in English, Italian,
     Argentinean and Cayman law.
         One valuable client for Attride is Koch
     Industries, the largest privately held corpora-
     tion in the world. The firm has recently been
     involved in the reorganisation of the
     Bermudian assets of Koch subsidiary
     Georgia-Pacific, advising the pulp paper
     manufacturer in regard to (among other
     things) banking aspects of the reorganisa-
         In its insurance practice, the firm has
     been busy lately establishing captive compa-
     nies for several leading insurance managers –
     including Aon, JLT, Marsh and Nephila
     Capital – in Bermuda. Through the first
     quarter of 2009, Attride was working on
     incorporating three new insurance captives
     for clients.

     Leading lawyers
     Federico Candiolo
     Neil Horner
     Bala Nadarajah                                                                                       2010 EDITION

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