The Supreme Court of Bermuda has sanctioned a scheme of arrangement in relation to R&Q Re (Bermuda) Ltd.

A PwC spokesman called the scheme of arrangement innovative and the first of its kind in Bermuda. It was designed to protect creditors from the disruption, delays and significant costs associated with an insolvency process.

“The scheme of arrangement, under sections 99 and 100 of The Companies Act 1981, involves proposing a restructuring arrangement to the company’s creditors,” PwC revealed.

“If the requisite statutory majority of creditors votes in favour of the scheme of arrangement and the court sanctions it, it becomes binding on the creditors, regardless of whether they voted.”

Creditors voted unanimously in support of the scheme of arrangement on January 27, and the Supreme Court of Bermuda sanctioned it on January 31.

Parri Spector, director of R&Q Re (Bermuda) Ltd, said: “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, the PwC partner who was appointed scheme supervisor, 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,” he said.

Arthur Wightman, territory leader, PwC Bermuda, said it reinforced 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,” he said. “We will always explore a range of options to achieve recovery and stability wherever possible.”

Conyers chairman Christian Luthi, who acted for the company, said the scheme could 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 reinsurance market,” he said.