On 21 April 2023, the English High Court handed down its written reasons for sanctioning the Adler Group restructuring plan proposed under the new Part 26A regime of the UK's Companies Act 2006, which raised questions regarding the jurisdiction of the Court, cross-class cramdowns, pari passu issues and competing valuations, Mondaq reported. Following the introduction of a new restructuring regime in the Cayman Islands this analysis delves into the ramifications of the recent Adler Group decision and its potential impact on further revisions to the Cayman Islands' Companies Act.
Cayman Islands
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The Companies (Amendment) Act 2021 (the "Amendment") introduces, with effect from 31 August 2022, a welcome update to the Cayman Islands restructuring regime as is contained in Part V of the Cayman Islands Companies Act (2022 Revision) (the "Act"), Mondaq reported. The amendment introduces the concept of a Company Restructuring Officer (CRO), whose mandate is to oversee and implement a restructuring of the company's debts under the supervision of the Grand Court of the Cayman Islands.
Parliament has passed amendments to the Companies Act that reform Cayman’s restructuring regime for insolvent companies, the Cayman Compass reported. The changes introduce a formal restructuring procedure under the supervision of a restructuring officer outside the traditional winding-up process. Distressed companies can now apply to the Grand Court for a restructuring officer to be appointed when the company is unable to pay its debt and aims to present an alternative arrangement or compromise to its creditors.
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A Cayman Island mutual fund whose manager was charged in a $100 million bait-and-switch scheme filed for chapter 15 bankruptcy protection in the U.S. to protect its assets from lawsuits by disgruntled investors, Bloomberg News reported. Representatives of the so-called Income Collecting 1-3 Months T-Bills Mutual Fund asked a federal bankruptcy judge in New York on Friday to recognize their efforts to liquidate the company, which they said would include an attempt to pay back investors. Recognition of the foreign liquidation would put a hold on any lawsuits against the fund.
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Beleaguered rich-lister Eric Watson will likely remain embroiled in courts for years — and faces the possibility of a tax bill of $200m when penalties are added — after a landmark court decision yesterday saw his businesses ruled to have engaged in $51.5m in tax avoidance, The New Zealand Herald reported. Justice Matthew Palmer said a complex 2002 transaction — involving Cayman Island companies while Watson himself was relocating from New Zealand to the UK for tax purposes — was an avoidance arrangement. The case is one of the largest tax judgments in New Zealand history.
Offshore oil rig operator Vantage Drilling International agreed to disgorge $5 million in a settlement with U.S. regulators related to a corruption probe in Brazil involving Petrobras, The Wall Street Journal reported. Vantage Drilling, based in the Cayman Islands, settled with the U.S. Securities and Exchange Commission over accounting-control deficiencies at its predecessor company that violated the Foreign Corrupt Practices Act.
International offshore driller Ocean RIG UDW Inc filed for Chapter 15 bankruptcy protection in a U.S. court late Monday, hit by cancellations as major oil producing customers withdrew from deep water projects amid falling oil prices, Reuters reported. The Cayman Islands holding company, which spent heavily on new drill ships earlier in the decade, said lower oil prices will continue to weigh on client demand during 2017. More than half of its drilling units are currently inactive. In a filing with the U.S.
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Two Platinum Partners hedge funds have sought U.S. Chapter 15 bankruptcy protection as part of an ongoing liquidation effort, according to court documents filed in New York federal court Tuesday. In August, a Cayman Islands court ordered that an outside expert unwind the so-called offshore versions of its flagship hedge fund, Platinum Partners Value Arbitrage, which, along with the firm, is also being investigated by U.S. authorities. That liquidator, RHSW Caribbean, filed the Chapter 15 bankruptcy petition which seeks to protect Platinum's U.S.
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Worldview Capital, the dissident shareholder in Petroceltic International that has battled its board for more than a year, has emerged in prime position to gain control of the troubled exploration company after doing a deal with its banks to buy a majority of its $232 million debts, the Irish Times reported. The Cayman Islands-registered fund, run by former investment banker Angelo Moskov, has told the stock market it bought has 69.44 per cent of the senior debt at at “a significant discount to face value”.
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Offshore driller Vantage Drilling Co said it reached a support agreement with lenders and noteholders holding more than $1.6 billion in debt to reduce interest expense but one of its units will file for U.S. bankruptcy on Dec. 3. The agreement and bankruptcy will help its subsidiary Offshore Group Investment Ltd to ride out a downturn in the energy sector. The company said the deal with lenders calls for deleveraging the unit, which holds the contracts for some of its rigs.
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