Introduction
In certain circumstances, the liquidator of a British Virgin Islands (“BVI”) company may be able to set aside certain transactions which took place in the lead up to the company’s liquidation. It is important for those concerned with the affairs of a BVI company that they are aware of the statutory powers available to the liquidator.
Introduction
If you are considering terminating a Cayman company by way of voluntary liquidation or strike-off, it is crucial to adhere to specific deadlines and procedures to avoid unnecessary fees for the year 2024. There will be varying requirements depending on whether the entity is regulated or non-regulated.
Options for termination - voluntary liquidation or strike-off
Introduction
Liquidations in the British Virgin Islands (“BVI”) can be either:
1) an insolvent liquidation and therefore governed by the Insolvency Act 2003 (as amended) (“Insolvency Act”); or
2) a solvent liquidation and therefore governed by the BVI Business Companies Act (as amended) (“Companies Act”). The Companies Act was amended by the BVI Business Companies (Amendment) Act 2022 and BVI Business Companies (Amendment) Regulations 2022.
Introduction
Liquidations in the British Virgin Islands (“BVI”) do not have a rescue function and mark the end of a company’s lifecycle. A liquidation in the BVI can be either:
In certain circumstances the official liquidator of a Cayman company may be able to take action to recover assets which have been transferred in the run up to the company’s insolvency. It is important for those concerned with the affairs of a Cayman company in the twilight of insolvency to be aware of the statutory powers available to the official liquidator and the Grand Court in the Cayman Islands.
Summary
With local and global inflation at their highest in decades, rising interest rates, continuing supply chain woes and the effects of the Russia-Ukraine conflict being felt across Asia, many businesses that are established in the British Virgin Islands (BVI) and the Cayman Islands are scrutinising the available tools to avoid liquidity issues and potential insolvency. The economic fallout from covid-19 and related restrictive measures, along with bond defaults by various PRC property developers, has only exacerbated this crisis.
Introduction
The Grand Court of the Cayman Islands has recently offered additional, useful guidance in the growing jurisprudence on the insolvency of Segregated Portfolio Companies (“SPCs”). We have previously discussed the applicable test of insolvency that applies to the appointment of a receiver in respect of a segregated portfolio (“SP”) of an SPC here.
In The Matter of Padma Fund L.P. [FSD 201 of 2021] (RJP), the Cayman Grand Court held that the Cayman Court does not have jurisdiction to order the winding up of a Cayman exempted limited partnership (“ELP”) on the basis of a creditor’s petition for the winding up of the ELP. The Court ruled that the correct procedure for a creditor to follow is to commence proceedings against the general partner of the ELP for an unpaid debt.
Introduction
The proposed introduction of a corporate restructuring regime in the Cayman Islands is a welcome development and is considered by many to be long overdue. Presently, Cayman Islands law does not provide for any formal corporate restructuring process; a position which can be contrasted with, for example, the United Kingdom and the United States whose respective “administration” and “Chapter 11 bankruptcy” processes have been available for many years.
Current Cayman Islands law