Introduction
Facts
Decision
Comment
On 11 November 2022, the Grand Court of the Cayman Islands heard the first petition to appoint restructuring officers under the new Cayman Islands restructuring regime that came into force on 31 August 2022.
On 11 November 2022, the Grand Court of the Cayman Islands heard the first petition to appoint restructuring officers under the new Cayman Islands restructuring regime that came into force on 31 August 2022.
The UK Supreme Court handed down its decision in BTI v Sequana on 5 October 2022, unanimously dismissing the appeal from the 2019 Court of Appeal decision and confirming how directors duties ought to be applied when a company is in the zone of insolvency. Although decisions of the UK Supreme Court are not binding upon the jurisdictions in which Ogier practises law, it will nevertheless be highly persuasive and influence the approach taken in the offshore jurisdictions that Ogier advises upon.
Reports last week of the significant increase in corporate insolvencies and voluntary liquidations in England and Wales for Q2 demonstrate the combined impact of government COVID-19 support being withdrawn, soaring energy and fuel costs, and weakening demand – and are being reflected in the nature of the instructions coming into our global jurisdictions from distressed companies across the globe.
The Grand Court of the Cayman Islands (Court) has confirmed that the Court has the jurisdiction to grant declaratory relief within winding-up proceedings (In the Matter of Polarcus Limited (In Official Liquidation) (Unreported, Justice Kawaley, 23 June 2022 Cause No: FSD 31 of 2021 (IKJ)).
This is welcome clarity for insolvency practitioners and other stakeholders in winding-up proceedings where such declaratory relief may be required and the relief cannot for some reason be included in a standard sanction application.
Background
Seahawk China Dynamic Fund: winding up on just and equitable grounds
In a recent decision, the Grand Court of the Cayman Islands grappled with the question of whether the need for an investigation into the affairs of the company is a stand-alone ground for winding up. While the Court did not determine the question conclusively, it did provide an indication of how it may rule if the issue were to be placed squarely before the Court again.
In the Matter of Seahawk China Dynamic Fund
Introduction
?Transactions that are automatically void
Transactions that are potentially voidable
Liability to contribute
When a Cayman Islands company (CayCo) goes into official liquidation, various antecedent transactions entered into in the lead up to that liquidation may be set aside, thereby allowing the recovery of assets of the CayCo to maximise the return to its stakeholders. This snapshot sets out a summary of challenges that may be made to antecedent transactions in the Cayman Islands. These may also apply to Limited Liability Companies, Partnerships, Exempted Limited Partnerships and, in certain circumstances, to foreign companies, but this snapshot focuses on CayCos.