The Grand Court confirms that the Court has the jurisdiction to appoint an alternative voluntary liquidator in place of a Liquidating Agent under a limited partnership agreement.

Background

Many will have waited for a bus only for two to come along at once. So it is in the Cayman Islands, with the ongoing saga as to whether a shareholder can make a claim for misrepresentation in a liquidation and, if so, where such a claim ranks in the order of priority. The rule in Houldsworth barring such claims has been in existence for over 140 years. However, two liquidations have, within weeks of each other, sought to overturn this longstanding rule.

FEBRUARY 2024 mourant.com 2021934/89586498/1 UPDATE 2023’s most significant legal developments and what to look out for in 2024 Update prepared by Saniyé Tipirdamaz, Adrian Dobbyn, Eléonore Galleron, Mathieu Gangloff and Romain Bordage (Luxembourg) In 2023, in Luxembourg, we witnessed a number of significant legal developments in the areas of Banking & Finance, Restructuring & Insolvency, Corporate, Investment Funds and Tax. In 2024, new legislation which will impact upon businesses and their investment strategies are expected to be introduced.

Following on from the UK Supreme Court decision in Sequana (discussed here), the recent UK High Court (UKHC) decision in Hunt v Singh [2023] EWHC 1784 (Ch), further considered the duty of directors to take into account the interests of creditors in certain circumstances.

In the Matter of Holt Fund SPC (Unreported, 26 January 2024) is the first occasion where an application has been made to appoint Restructuring Officers over portfolios of a segregated portfolio company. At first glance the judgment appears uncontroversial. However, it highlights a lacuna in the law which readers should be aware of.

Background

The Petitioner sought the appointment of Restructuring Officers (ROs) in respect of two segregated portfolios of the Holt Fund SPC.

The High Court (Court) recently dismissed a petition seeking the winding up of a biofuel company (Company).

The ex tempore judgment is of note because it considers the standing of the Petitioner to bring the application and the consequences of a relevant witness not being cross-examined by the Petitioner on his affidavit evidence regarding the solvency of the Company.

Background

Looking back at 2023, one of the more memorable judicial decisions emanating from Jersey was the decision of the Court of Appeal in HWA 555 Owners, LLC v Redox PLC S.A. and Thieltgen [2023] JCA 085. In this update we explore how this decision might impact upon the creditors’ winding-up regime provided for in the Companies (Jersey) Law 1991.

HWA 555 Owners, LLC v Redox PLC S.A. and Thieltgen

Introduction

In this article we explore the key trends which are currently shaping the landscape of private wealth disputes, including mental capacity as a central theme in private wealth disputes, trust insolvency and disputes relating to trustee investments.

Mental capacity

Mental capacity is increasingly a central theme on the landscape of private wealth disputes. Why? The starting point is that there is, more so than at any point previously, a wider recognition of the seismic consequences of establishing mental incapacity on the part of the relevant decision maker.

The Grand Court of the Cayman Islands has provided further guidance on the new restructuring officer (RO) regime under section 91B of the Companies Act (2023 Revision) (the Act), which came into force on 31 August 2022.

In Re Aubit International (Unreported, 4 October 2023), the Grand Court dismissed a petition to appoint restructuring officers and found that it did not have jurisdiction to grant the relief requested on the basis that there was no credible evidence of a rational restructuring proposal with reasonable prospects of success.

The scheme of arrangement (Rescue Plan) prepared by the examiner of Mac Interiors Limited (Company) has not been approved by the High Court following strong objections from the Revenue Commissioners (Revenue).

In its challenge, Revenue argued that there had been an error in “class composition” or, in other words, an error in the classification of creditors that voted on the Rescue Plan.

Class Composition