R&Q Re (Bermuda) receives approval for Scheme of Arrangement

On June 26, 2024, R&Q Insurance Holdings Ltd. announced the appointment of joint provisional liquidators (JPLs) as part of its restructuring process, marking a significant shift in the company’s path that ultimately led to the approval of the Scheme of Arrangement by the Supreme Court of Bermuda on January 31, 2025.

This pioneering Scheme is the first-of-its-kind in Bermuda and represents a novel approach designed to protect creditors from the disruptions, delays, and high costs typically associated with the insolvency process.

Under sections 99 and 100 of The Companies Act 1981, the Scheme involves presenting a restructuring plan to the company’s creditors.

If the required majority of creditors approve the plan, and the Court sanctions it, the Scheme will be binding on all creditors, regardless of their vote. Creditors unanimously approved the Scheme on 27 January 2025, and the Supreme Court of Bermuda officially sanctioned it on 31 January 2025.

Parri Spector, Director of R&Q Re (Bermuda) Ltd., added: “The terms of this Scheme of Arrangement create a structure that provides for a solvent resolution that is binding on creditors of the company 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.”

Dan Schwarzmann, who was appointed Scheme Supervisor, and PwC partner, said: “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.

“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.”

Arthur Wightman, Territory Leader, PwC Bermuda, noted: “This innovative solution reflects our approach to restructuring, and reinforces Bermuda’s reputation as a leader in driving innovation through high-quality and thoughtful regulation. Our objective is to preserve or create value for organisations.

“We will always explore a range of options to achieve recovery and stability wherever possible. As we continue to support businesses facing crises, our specialists help identify problems, gain cooperation, develop innovative solutions, and implement them with precision.”

Christian Luthi, Chairman of Conyers, who acted for the company, said: “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.”

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