Seahawk China Dynamic Fund: winding up on just and equitable grounds
In a recent decision, the Grand Court of the Cayman Islands grappled with the question of whether the need for an investigation into the affairs of the company is a stand-alone ground for winding up. While the Court did not determine the question conclusively, it did provide an indication of how it may rule if the issue were to be placed squarely before the Court again.
In the Matter of Seahawk China Dynamic Fund
The approach of the Cayman Grand Court to the terms and timing of the discharge of provisional liquidators of In the Matter of Star International Drilling Ltd (unreported, FSD 88 of 2021 ASCJ) may provide a window into what is expected to be a similarly flexible approach to the appointment of restructuring officers.
Star International Drilling Ltd's application to discharge its joint provisional liquidators
Within the past 18 months, two bankruptcy courts have used the same factors, but reached opposite conclusions, about the characterization of two merchant cash advance funding transactions as either a “true sale” or not a “true sale” – and instead, a disguised financing. In doing so, the courts’ decisions confirm the importance of appropriate structuring to achieve true sale treatment.
In the recent decision In the Matter of Padma Fund L.P. (unreported, 8 October 2021) (Padma), Justice Parker found that the Grand Court of the Cayman Islands (Court) has no jurisdiction to wind up a Cayman Islands exempted limited partnership (ELP) on the basis of a creditors' petition. Instead, the Court found that an unpaid creditor must present a petition against the general partner (GP) of the ELP.
Yesterday, in Mission Product Holdings v. Tempnology LLC, the Supreme Court held that a trademark licensee may continue using a licensed trademark after its licensor files for bankruptcy and rejects the relevant license agreement. While a debtor-licensor may "reject" a trademark license agreement under Section 365 of the Bankruptcy Code, such rejection is only a breach of the agreement and does not allow the licensor to revoke the licensee's rights.
The Bankruptcy Court for the District of Delaware recently held that the Bankruptcy Code Section 546(e) safe harbors do not prevent a liquidation trust from pursuing some state law constructive fraudulent conveyance claims assigned to the trust by creditors.1 Notably, the Bankruptcy Court declined to follow the Second Circuit's recent Tribune decision, in which the Second Circuit concluded that the Section 546(e) safe harbors apply to state law constructive fraudulent conveyance claims on federal preemption grounds.2 Instead, the Bankruptcy Court decided that federal preemption did not appl