The following briefing provides a round-up of the Cayman legal and regulatory developments during the third quarter of 2022 that may be of interest to funds clients. We are pleased to note that there is nothing critical or requiring immediate action at this time.
Summary of recent legal and regulatory developments
On 30 April 2021, reforms to the UK’s regime governing sales in administration by way of a ‘pre-pack’ to a connected party purchaser came into force.
The centrepiece of the reforms is a new requirement for a connected party purchaser to obtain an opinion from an independent ‘evaluator’ on whether the terms of the sale are reasonable.
While the reforms add additional process points that must be navigated in relevant cases, they will bring improved transparency to an important rescue tool which has, at times, attracted warranted criticism.
On 20 January 2021, the UK High Court approved the convening of a single scheme meeting for certain aircraft lessors of MAB Leasing Limited (MABL) in relation its proposed UK scheme of arrangement. This is an important step towards the implementation of a wider restructuring for the Malaysia Airlines group, but may also have wider implications on the restructuring options available not only to airlines, but also to businesses with other leased assets, including real estate.
Lessors form a single class
On 6 September 2020, the England and Wales High Court approved the second scheme of arrangement proposed by Codere (an international gaming group) in a little over five years, following a fully contested convening hearing spread over three days.
In the convening judgment ([2020] EWHC 2441 (Ch)), the Court concluded that the various fees payable to the members of an ad hoc committee of scheme creditors did not fracture the single class proposed by Codere.
Over the past two or three years, we have seen an increasing number of cases where a client holds and wishes to sell or transfer shares in a Cayman Islands company which is in liquidation, or is seeking to purchase shares in such a company from another party. In those circumstances, the transfer of the shares would be void absent the validation of the Grand Court of the Cayman Islands, as a result of section 99 of the Companies Law (2013 Revision) ("Section 99"). Section 99 is in the following terms: