The Grand Court of the Cayman Islands has provided further helpful guidance to insolvency practitioners as to the circumstances in which leave will be granted to commence or continue proceedings against a company in liquidation. Adenium Energy Capital Limited (in official liquidation) (Adenium) is the latest in a line of cases in the Cayman Islands in which leave has been sought to commence proceedings under s 97(1) of the Companies Act against a Cayman Islands-incorporated company in liquidation.
The Cayman Islands Court of Appeal has recently delivered helpful clarification on the principles which apply with respect to security for costs when the official liquidators of an insolvent fund seek to bring claims against its former management. Where it is clear to the Court that a defendant was responsible for management decisions immediately before a company entered insolvency, the Court may exercise its discretion, notwithstanding the impecuniosity of the plaintiff company, not to order payment of security for costs.
On 18 January 2022, Hong Kong-listed cruise operator Genting Hong Kong Limited ('Genting HK') filed for provisional liquidation with the Supreme Court of Bermuda after it failed to secure access to liquidity. Genting HK has since gone into liquidation.
Background
Introduction
Hong Kong courts recently recognised reorganisation proceedings in Mainland China for the first time in Re HNA Group Co Limited [2021] HKCFI 2897, further enhancing the cooperation between Mainland China and Hong Kong in cross-border insolvency matters.
The facts
The Cayman Islands Government has published the Companies (Amendment) Bill, 2021 (Bill) which will introduce welcome amendments to the Companies Act (2021 Revision) (Act), to facilitate the efficient restructuring of distressed companies for the benefit of their stakeholders.