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This article answers FAQs on restructuring and corporate recovery options available in the Cayman Islands.
This article answers FAQs on restructuring and corporate recovery options available in the Cayman Islands.
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Introduction
It is trite law that where a petition debt is disputed in good faith and on substantial grounds, the ordinary practice of the Court is to dismiss or strike out the winding up petition. However, this principle is more easily applied in theory than in practice. As a result, the Grand Court of the Cayman Islands has observed recently that "It is remarkable how much case law has been generated in relation to a legal test which has essentially been settled for many years" (Re Sky Solar Holdings Ltd).
At the recent Chambers Economic Forum, the Cayman government announced its intention to bring in a much-anticipated new regime governing corporate restructuring by the end of 2020. Until then, with the COVID-19 pandemic pushing many groups into the zone of insolvency, the following considerations remain relevant to structures involving a Cayman entity:
At the recent Chambers Economic Forum, the Cayman government announced its intention to bring in a much-anticipated new regime governing corporate restructuring by the end of 2020. Until then, with the COVID-19 pandemic pushing many groups into the zone of insolvency, the following considerations remain relevant to structures involving a Cayman entity:
Until the Cayman Islands introduces any changes to its corporate insolvency regime, with the COVID pandemic pushing many groups into the zone of insolvency, the following considerations remain relevant to structures involving a Cayman Islands entity:
On 20 May 2020, the UK government introduced the Corporate Insolvency and Governance Bill (the Bill) to Parliament. The Bill went through a fast-track approval process in Parliament, received Royal Assent on 25 June 2020 and entered into force on 26 June 2020 as the Corporate Insolvency and Governance Act 2020 (the Act). The Act introduces a number of temporary and permanent measures which are designed to provide relief and support to businesses affected by COVID-19.
In an application by Joint Official Liquidators for sanction of an agreement to sell the assets of a Company over the objections of creditors, the Court has confirmed the importance of establishing a clear and transparent sale process, which enjoys the confidence of the interested parties, in order to establish that the sale agreement is in the best interests of creditors.
Background