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

Everyone, including the least empathic in our society (aka, lawyers), knows that we should seek to uphold the golden rule and “do unto others…” with respect to family, friends, and acquaintances, but does this also apply in the corporate world? Apparently so, as a Delaware bankruptcy court just ruled that preferred shareholders with a bankruptcy-filing blocking right (also known as a “Golden Share”) must consider the effects on other shareholders and all other creditors when exercising such right.

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: