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 High Court recently refused a winding up petition brought by a landlord against a tenant company that had not paid rent on its commercial premises for more than a year.
Lestown Property Limited v The Companies Act 2014 [2021] IEHC 513.
A dispute arose between a landlord, Lestown Property, and a tenant that operated a Leisureplex in Charlestown Shopping Centre. The Leisureplex was only accessible through the lobby of an adjacent cinema. The cinema was leased to a separate entity and was closed during the COVID-19 pandemic.
The Government has issued a press release stating that it has approved the publication of an upcoming Bill providing the legislative basis for a new insolvency process: the Small Company Administrative Rescue Process (“SCARP”). The announcement follows the publication of the General Scheme of the Bill last month and its indications that it would be prioritising this legislation.
A recent decision of the Cayman Islands Court of Appeal has confirmed its jurisdiction to hear an appeal of a decision of the Grand Court made pursuant to section 152(1) of the Companies Act (2021) Revision to dissolve a Company following its official liquidation.
Background
General Scheme Published.
The General Scheme of the Companies (Small Company Administrative Rescue Process and Miscellaneous Provisions) Bill 2021 was published this month. When enacted, this Bill will provide the legislative basis for a new corporate restructuring process that will be available to small companies: it is the Small Company Administrative Process (SCARP).
A General Scheme sets out the proposals for the text of a forthcoming Bill and the Government has granted approval for the priority drafting of this legislation (as discussed here).
Nordic Aviation DAC [2020] IEHC 445
In late 2020 the Commercial Division of the High Court approved a Scheme of Arrangement (Scheme) in respect an Irish-based aircraft leasing business Nordic Aviation Capital (NAC). The approved Scheme is of particular interest as it was recognised in the EU, UK and USA. NAC had secured and unsecured creditors in those jurisdictions on foot of loan or debenture instruments which were subject to New York, UK or German law.
The Minister of State for Trade Promotion, Digital and Company Regulation, Robert Troy TD, announced earlier this week the priority drafting of new legislation to introduce a new restructuring process. The Companies (Small Company Administrative Rescue Process and Miscellaneous Provisions) Bill 2021 will provide the statutory footing for what is now proposed to be termed the Small Company Administrative Rescue Process (“SCARP”).
The interplay between arbitration and insolvency proceedings has been a recurring theme across common law jurisdictions in recent months. It is therefore timely to consider the conflict between parties' contractual rights to arbitrate and their statutory rights to present a winding up petition and how a balance can be struck when determining which should prevail.
Introduction
The appointment of joint liquidators can be a useful tool in cross-border insolvency proceedings, particularly when assets are located in a number of jurisdictions. However, courts must ensure that a joint liquidator appointment does not lead to conflicting duties based on the respective laws in each jurisdiction. This was the main issue for consideration in West Bromwich Commercial Ltd v Hatfield Property Ltd, where Jack J was satisfied that the appointment of joint liquidators was necessary.