In a comprehensive judgment published on 23 April 2020, the Cayman Islands Court of Appeal, comprising Moses JA, Martin JA and Rix JA, has provided welcome clarification of the interplay between a contractual agreement to arbitrate disputes arising between shareholders and the exclusive jurisdiction of the Court to determine whether a company should be wound up on the just and equitable ground.
The Court of Appeal has provided much needed clarification of the test for validating certain transactions by companies that are subject to a winding-up petition, pursuant to Section 99 of the Companies Law (2020 Revision).
The Cayman Islands Court of Appeal has provided much needed clarification of the test for validating certain transactions by companies that are subject to a winding up petition, pursuant to section 99 of the Companies Law (2020 Revision) (the "Companies Law").
The Legal Issue of Principle
Domestic Procedures
What are the principal insolvency procedures for companies in your jurisdiction? | Liquidation: voluntary and official. Cayman does not have an equivalent to the English concept of the company administration or to the Chapter 11 process in the United States. Schemes of Arrangement/“Soft Touch Liquidations” allow the company to enter into an agreement with its shareholders and/or creditors. |
On 27 December 2016, the Board of the Romanian Financial Supervisory Authority (“FSA”) analysed the status of the insurance and reinsurance undertaking LIG Insurance SA, ultimately, commencing bankruptcy procedures against LIG Insurance SA and withdrawing its license to carry on insurance and reinsurance activity (FSA Decision 2347/2016).
According to the FSA, on 31 October 2016 the company had: (i) negative own capital of RON 56.2 million; and (ii) a liquidity ratio of 0.44, resulting in concern over its capacity to cover its due obligations using own funds.
On 27 July 2016, the Board of the Romanian Financial Supervisory Authority (“FSA”) analysed the status of the Romanian insurance undertaking Carpatica Asig SA, considering several audit and assessment reports. The outcome of the FSA analysis was the commencement of the bankruptcy procedures against Carpatica Asig SA.
On 26 August 2015, the Board of the Romanian Financial Supervisory Authority (“FSA”) analysed the status of the Romanian insurance undertaking ASTRA SA, considering the report of the special administrator, KPMG Advisory.
According to the FSA, on 30 June 2015, ASTRA SA had: (i) a negative available solvency margin of approximately RON 871 million (approximately EUR 197 million), (ii) a liquidity ratio of 0.03, and (iii) a capital shortage of approximately RON 968 million (approximately EUR 220 million).
On 16 April 2014, the Official Gazette published Norm 5 of 2014 of the Romanian Financial Supervisory Authority (the“FSA”) as a supplement to several regulations relating to the calculation of the re/insurer’s solvency margin, the minimum solvency margin and the safety fund (“Norm 5/2014”).
On 14 April 2014, the Official Gazette published Order 562 of 1 April 2014 for the amendment of and supplement to Order 235 of 2001 regarding the insurance of tourists against the insolvability or bankruptcy of travel agencies (“Order 562/2014”).