The Cayman Islands Government has published a Commencement Order confirming that the Companies (Amendment) Act, 2021 will come into force on 31 August 2022.
The Amendment Act introduces a new corporate restructuring process and the concept of a dedicated restructuring officer into the Cayman Islands Companies Act (2022 Revision).
Under the Amendment Act, the filing of a petition for the appointment of a restructuring officer will trigger an automatic global moratorium on claims against the company, giving it the opportunity to seek to implement a restructuring.
What remedies should lenders, borrowers and opportunistic credit investors prescribe in light of current market practice and documentation?
This article examines some of the current issues arising in leverage finance agreements on defaults and the expansion of express remedy terms that can impact on debt transfers.
Key Points
Houst Limited's (the Company) restructuring plan (under Part 26A of the Companies Act 2006) (RP) was recently sanctioned at the High Court on 22 July 2022.
KEY TAKEAWAYS
We consider the implications for office-holder claimants of the recent case ofKelmanson v Gallagher & De Weyer [2022] EWHC 395 (Ch).
The case raises interesting points of practice for insolvency practitioners: a director consciously trying to evade or 'game' the statute won't work to prevent office holder recovery, but a sincerely held but mistaken belief on the director's part as to what was being done doing could.
KEY POINTS:
The Grand Court of the Cayman Islands has recently ruled In the Matter of Formation Group (Cayman) Fund I, LP (Formation) 1 that it is possible to bring a just and equitable petition to wind-up an exempted limited partnership (ELP) in its own name, as opposed to that of the general partner (GP). This decision contradicts aspects of Justice Parker's judgment In The Matter of Padma Fund LP (Padma). 2 In this update, we consider these conflicting first instance decisions.
In two relatively recent but unrelated decisions, the Eastern Caribbean Court of Appeal has provided helpful guidance in relation to how the Court ought to deal with an application for the appointment of a liquidator in circumstances where the company asserts a cross-claim in an amount exceeding the applicant's debt.
Introduction
A Cayman segregated portfolio company, Performance Insurance Company SPC, was placed into official liquidation. The joint liquidators' appointment extended to all of the underlying segregated portfolios (SPs), some of which were solvent and others insolvent. Two of the solvent SPs applied to the Grand Court of the Cayman Islands seeking the appointment of an additional liquidator of the company to separately represent the interests of those solvent SPs on the basis that the original liquidators were conflicted in administering both the solvent and insolvent SPs.
MR DOLLAR BILL LTD V PERSONS UNKNOWN AND OTHERS [2021] EWHC 2718 (Ch)
In an ex parte on short notice application, the Cayman Islands Grand Court considered the four hurdles that must be overcome for the appointment of joint provisional liquidators (JPLs).
The application was brought by an individual investor in Seahawk China Dynamic Fund (the Applicant and the Company). The Applicant submitted that he became aware of dishonest conduct on the part of Hao Liang (Mr Liang) who held all of the management shares in the Company.