¶ 2401
Overview
The statute. The Insolvency and Bankruptcy Act 2025, Act No. 13 of 2025, received the assent of the Governor-General on July 18, 2025 and was gazetted on July 19, 2025. Insolvency and Bankruptcy Act, No. 13 of 2025 (Belize) ("the 2025 Act"). Its long title describes an Act governing the insolvency of companies, creditors' arrangements, administration, receivership, liquidation, the bankruptcy of individuals, the licensing of insolvency practitioners, the disqualification of directors, "the avoidance of certain transactions, cross border insolvency issues, netting" and a simplified procedure for eligible companies. Id. long title. It has twenty-two Parts and 520 sections. It repeals the Bankruptcy Act, Cap. 244, which had governed the bankruptcy of individuals since the beginning of the twentieth century. Id. s. 518(1). The Act comes into force on dates appointed by the Minister by order, and different dates may be appointed for different provisions. Id. s. 520. The Financial Services Commission, which supervises insolvency practitioners under the Act, has published a schedule of five phases, the last of which is to begin in June 2027 (see infra ¶ 2410.04).
Why the Act matters to Belize structures. The 2025 Act touches the trusts, LLCs and foundations examined in this book at four points. First, its definitions of insolvency in section 8 state in Belize's own legislation that insolvency is a financial condition established by the failure to pay a single creditor, which is the reading of section 7(6)(c) of the Trusts Act advanced in chapters 11 and 23 (see supra ¶¶ 1150.07, 530.09; see supra ch. 23). Second, its repeal of the Bankruptcy Act removes the provision, section 43, to which section 7(7) of the Trusts Act and section 83(7) of the Foundations Act refer, and replaces it with new avoidance provisions in Parts VII and XV. Third, its bankruptcy and liquidation Parts determine what a Belize trustee in bankruptcy or liquidator may take from a settlor, a member or a founder, and what happens when a company, an LLC or a foundation is itself unable to pay its debts. Fourth, its cross-border Parts XVIII and XIX create, for the first time in Belize, a statutory procedure by which a foreign trustee in bankruptcy or liquidator may seek recognition and assistance in the Belize court.
The questions this chapter answers. Earlier chapters have deferred several questions to this one. Chapter 5 and chapter 11 asked whether the voidable-transaction provisions of the 2025 Act re-enact section 43 of the Bankruptcy Act, so that section 7(6) of the Trusts Act prevails over them as it prevailed over section 43 (see supra ¶¶ 580.03, 1160.06). Chapter 11 also asked whether an avoidance claim brought by a recognised foreign representative is a claim "pursuant to . . . the order of a court of another jurisdiction" (see supra ¶ 1160.07). Chapter 17 asked whether a Belize office-holder who attacks a member's transfer to an LLC must proceed under section 37 of the LLC Act (see supra ¶ 1770.02). Chapter 15 asked how the manager's statutory power to prefer creditors on the winding up of an insolvent LLC relates to the new law of voidable preferences (see supra ¶ 1580.10). Chapter 21 asked whether the reference to section 43 in the Foundations Act extends to the 2025 Act, and whether a creditor may present a petition against a foundation (see supra ¶¶ 2150.10, 2170.09). This chapter answers each of them from the text of the statutes.
The method. The chapter quotes the 2025 Act from the text as enacted, from the official printed text of Act No. 13 of 2025, and the Interpretation Act, Cap. 1, from the Revised Edition 2020. Where the commencement of a Part depends on an order that this chapter has not been able to read, the chapter says so and states the Commission's published schedule as a schedule. No reported Belize decision applying the 2025 Act has been located. The Act is new and its main Parts are not yet in force, so the analysis rests on the statutory text, read with the Trusts Act, the LLC Act, the Foundations Act and the Interpretation Act.
Conclusions in summary. The chapter reaches six conclusions. (1) The 2025 Act's tests of insolvency, both in section 8 and in the definitions of an "insolvency transaction" in Parts VII and XV, turn on non-payment, and none requires a proceeding. (2) The 2025 Act's individual and corporate insolvency procedures reach individuals, companies formed or continued under the Belize Companies Act and foreign companies. They do not, on their terms, apply to a Belize LLC or a Belize foundation, which are wound up under their own statutes. (3) The voidable-transaction provisions of Part XV re-enact, with modification, the avoidance of voluntary settlements formerly in section 43, and under section 67(3) of the Trusts Act and section 27 of the Interpretation Act the reference to section 43 in section 7(7) of the Trusts Act is to be read as a reference to them. (4) A claim brought in Belize on behalf of the creditors of an insolvent settlor, by a foreign representative whose standing rests on a foreign court's order, is within section 7(6)(c). (5) A claim by a Belize trustee in a Belize bankruptcy is a domestic claim under Belize law, limited by Belize's own periods of vulnerability, its insolvency-transaction test and its protection of good-faith purchasers. (6) The LLC Act and the Foundations Act each contain a specific code for transfers to an LLC or a foundation, which on the better reading governs claims by Belize office-holders and excludes the general avoidance provisions of the 2025 Act.
Plan of the chapter. Paragraph 2410 describes the Act's Parts and its phased commencement, and the consequences of the early repeal of the Bankruptcy Act. Paragraph 2420 examines the tests of insolvency. Paragraphs 2430 and 2440 describe the bankruptcy of an individual and the corporate procedures. Paragraph 2450 examines the voidable-transaction provisions. Paragraph 2460 examines the Trusts Act after the repeal, and paragraph 2470 the LLC Act, the Foundations Act and the Belize Companies Act. Paragraph 2480 examines the cross-border Parts and the position of a foreign trustee in bankruptcy before and after their commencement. Paragraph 2490 states planning and drafting points and a checklist.