What a creditor needs to know about liquidating GUIDE an insolvent Cayman company
Last reviewed: December 2020
Contents
Introduct ion When is a company insolvent? What is a statutory demand?
Can’t get no satisfaction? Sometimes you can! Would you prefer to have security to cover a debt or the cash in the bank, challenges?
Obtaining Decree
In most circumstances, court proceedings will need to be raised by creditors to recover outstanding sums owed. Depending on the amount due, the action will be a Small Claim (up to and including £3,000) a Summary Cause (over £3,000 and up to and including £5,000) or an Ordinary Action (over £5,000).
After obtaining a Decree (or judgement in England) there are a number of steps that can be taken, if the debtor does not make payment, to recover the outstanding debt. In Scotland this process is known as “diligence”.
It was anticipated that more radical thoughts would emerge from Lord Justice Jackson’s latest speech last night to the Insolvency Practitioners’ Association on the subject of rolling out more fixed costs, and so it proved.
In the case of Bibby Factors Northwest Limited v HFD Limited and MCD Group Limited the Court of Appeal has ruled that there is ordinarily no duty on a company whose debt has been purchased (the Debtor) to inform the purchasing company (the Funder) of any pre-existing contractual arrangements it has with the company assigning the debt (the Assignor). If the Funder wants this information it must directly request it.
Implications
Will you be ready for the March 2016 contingent asset submission deadline? Following the publication of the PPF’s draft levy determination for the 2016/17 levy year, we look at what questions you should be asking now to ensure you are prepared for the deadline.
The Grand Court of the Cayman Islands (the Court) recently ruled in favour of Primeo Fund (in official liquidation) (Primeo) in its ongoing representative proceedings with the Additional Liquidator of Herald Fund SPC (in official liquidation) (Herald).
On 4 June 2015 the Cayman Islands Grand Court ruled in favour of Primeo Fund (Primeo), in the ongoing Representative Proceedings between Primeo and Herald Fund SPC (Herald). The Court had to construe section 37(7)(a) of the Companies Law. Although the Court's detailed reasons are still awaited, it is clear from the Court's decision that section 37(7)(a) does not apply to redeeming investors whose shares have been redeemed prior to the commencement of the liquidation.
Strike off is the procedure of removing a company from the Register of Companies (the Register) following which the company will cease to exist.
Under the Companies (Guernsey) Law, 2008 (the Companies Law), a company may be struck off in one of three situations:
- if the company is defunct;
- if the company is defaulting; or
- if the company itself applies to be voluntarily struck off.
Strike off by the Registrar of Companies
The Registrar of Companies (the Registrar) has the power pursuant to the Companies (Guernsey) Law, 2008 (the Companies Law) to strike off companies which are either defunct or defaulting.