Atlantic International Bank Limited: Status and Next Steps

April 04, 2019

Dear AIBL Client,

Atlantic International Bank Limited (AIBL) has not issued any official notices to date confirming the reports that it is winding up its business, but unofficially we have received some confirmation of the same from our bankers. We are advised that the bank continues to operate and will process international wire transfers for account holders wishing to transfer funds from their account to a foreign account. However, this will be on a first come first serve basis, and wires will be sent out in the order received. AIBL is currently awaiting Central Bank approval for those wires (as described below for voluntary winding up) and will begin sending these out as soon as approval is received.

Reading in between the lines, it appears that AIBL is likely applying for approval from the Central Bank for voluntary winding up. This why we cannot expect any official statement from AIBL at the moment.

The process for winding up an International Bank is provided for in Part VI of the Banks and Financial Institutions Act, Chapter 263 of the Laws of Belize. Winding up will either be voluntary or compulsory depending on whether the bank is solvent or insolvent, and the bank will seek Central Bank approval for the same. According to Section 40 of the Act, if the Central Bank approves a voluntary winding-up of the bank, AIBL would then "(a) cease operations, retain only necessary staff and exercise it's powers only of effect an orderly liquidation and (b) repay its depositors and creditors. Within 30 days of approval by Central Bank of the voluntary winding up, AIBL is required to provide a notice to depositors and to publish the same in the Government Gazette as well as post notices at all branch offices. At this point, depositors and creditors would file a claim with AIBL and the time frame for repayment of depositors would be set by the Central Bank. The voluntary winding up process appears fairly straightforward and depositors and creditors of the bank are made a priority. No other distribution can be made from the assets of the bank until all claims of depositors and creditors are paid.

However, even where the process starts out as voluntary, if the Central Bank determines that AIBL is insolvent, then it is required to initiate the compulsory winding up process through the courts. Under Section 45 of the Act, the Central Bank may seize control of AIBL in six situations largely having to do with the projected inability of the bank to meet its obligations. Within 30 days after a seizure by Central Bank, it must institute proceedings in the Supreme Court for the compulsory winding up of AIBL.

The time frame for compulsory winding up is protracted, which includes several notice periods, and priority of payment appears to be different than in a voluntary winding-up. The ultimate decision to compulsorily wind up the bank would be taken by the Supreme Court if it make a determination that conditions for a voluntary winding up do not exist. Where the Court decides that the bank shall but compulsorily wound up, depositors, creditors and those with safety deposit boxes are to receive a statement of account within 60 days thereof. Any objections to the statement of account must be filed within 60 days after receipt of said statement. There is another 90-day period after the last day stated for filing of claims against the bank. A schedule of actions to be taken in winding up the bank is subsequently filed, and notice of and location for the inspection of the schedule of actions is published for three weeks. There is also a period for objections to be filed in respect of the proposed distribution which would only begin "as soon as practicable" after all objections have been heard and determined.

According to Section 62 of the Act, priority of payment in a compulsory winding up is as follows:

  • (a) firstly, the necessary and reasonable expenses incurred by the Central Bank or Statutory Administrator in carrying out its or his functions under the Act;
  • (b) secondly, the wages and salaries of the officers and employees of the licensee that accrued during the three months immediately preceding the seizure of the licensee under this Act;
  • (c) thirdly, all taxes due and other imposts owing to the Government of Belize;
  • (d) fourthly, the fees, debts and assessments owing to the Central Bank;
  • (e) fifthly, all deposits in amounts not exceeding five thousand dollars per depositor, respectively;
  • (f) sixthly, all other deposits; and
  • (g) seventhly, all other unsecured claims of creditors.

Unfortunately, a compulsory winding up process appears lengthy, and therefore we hope that AIBL is able to wind up its affairs voluntarily. The steps taken so far to allow wire transfers indicate that AIBL is currently on a voluntary winding up path, and as a customer of AIBL, we eagerly await confirmation of the same.


Wrobel & Co., Attorneys-at-Law in Belize Staff

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