JANUARY 2022 BVI | CAYMAN ISLANDS | GUERNSEY | HONG KONG | JERSEY | LONDON mourant.com 2021934/82 67 1 01 9/1 UPDATE BVI Court refuses to give effect to foreign insolvency law to override ownership rights under BVI law Update prepared by Eleanor Morgan, Jennifer Jenkins and Shane Donovan (British Virgin Islands).
Overview
In the October 2021 edition of IBA Insolvency and Restructuring International, Peter Hayden and Jonathan Moffatt explain recent decisions in the UK and the Cayman Islands on the narrowing of the rule in Prudential and its implications for shareholders and creditors considering litigation.
Introduction
The Cayman Islands' legislature has recently gazetted the Companies (Amendment) Bill, 2021 (the Amendment Bill), proposing the introduction of a new corporate restructuring process and the concept of a dedicated 'restructuring officer' into the Cayman Islands Companies Act (2021 Revision). Under the Amendment Bill, the filing of a petition for the appointment of a restructuring officer would trigger an automatic global moratorium on claims against the company, giving it the opportunity to seek to implement a restructuring.
1. Related Fund Entity filings for private funds]
On 1 September 2021, the Cayman Islands Monetary Authority (CIMA) issued a Notice advising industry that a new Related Fund Entity (RFE) form for private funds was available for use via CIMA's Regulatory Enhanced Electronic Forms Submission (REEFS) portal.
The Government has extended the restrictions in place concerning winding-up petitions and forfeiture of business tenancies until 30 September 2021 and 25 March 2022 respectively.
The extensions will receive a mixed reception, with landlords likely to feel particularly aggrieved at the limitations imposed on their ability to pursue debt (by winding-up petition) in circumstances where the tenant can pay, but won’t pay.
Insolvency practitioners will need to be familiar with three new Statements of Insolvency Practice which were introduced with effect from 1 April 2021.
Companies House temporarily paused their strike off processes in April 2020 in response to the COVID-19 pandemic. The effect of this was to stay all strike off action. The stay was lifted on 10 October 2020 but stayed for a second time on 21 January 2021.
The second stay was lifted on 8 March 2021 and, absent further significant disruption caused by COVID-19, is unlikely to be subject to a further stay.
In Sarjanda Ltd (in liquidation) v Aluminium Eco Solutions Ltd and another [2021] EWHC 210 (Ch), an application to rescind a winding up order was refused where the application had been made over two years outside of the five-day time limit. That level of delay, allegedly caused by the company negotiating payment of its debts, was not a good enough reason for the breach of the time limit.
Practitioners are likely to be familiar with the provisions of The Corporate Insolvency and Governance Act 2020 (“CIGA 2020”) which introduced new permanent measures to complement the insolvency regime as well as a number of temporary measures to support business dealing with the effects of the COVID-19 pandemic.