“the new restructuring officer regime and the other amendments to the Companies Act … address certain of the challenging issues previously experienced by practitioners with the restructuring provisional liquidation regime”

Introduction

The Cayman Islands continues to be at the forefront of developments in restructuring and insolvency law in the offshore world and one of the premier jurisdictions of choice to facilitate complex and high-value cross-border restructurings.  

There is an expectancy of an increase in this area, together with a rise in distressed mergers and acquisitions activity, writes William Greensmyth of Walkers Ireland.

Corporate insolvency rates have been relatively low during the pandemic, but as government support measures fall away, there is an expectancy of an increase in corporate restructurings, together with an increase in distressed M&A activity.

In a recent decision,¹ the Grand Court of the Cayman Islands considered the approach the Court will take when reviewing official liquidators' fees, the extent to which the Wednesbury reasonableness test is relevant and the need to file sufficient evidence in advance of the fee approval application hearing.

The BVI Registrar of Corporate Affairs (the Registrar) maintains a Register of Companies (the Register) which records the name of each company incorporated or continued under the BVI Business Companies Act, 2004 (as amended) (the Act).

This guide examines the procedures by which the name of a company may be struck off, or restored to, the Register under the Act.

What is strike off?

The impact of Covid-19 is clearly the big talking point for 2022, with several questions arising: will new variants emerge, what steps will governments take to limit the spread, and what impact will it have on industries? To date, enforcement actions, insolvencies and restructurings have been relatively light, but with new restructuring legislation reforms on the horizon, and creditors starting to ramp up speed to enforcement, it appears likely that there will be an increase in winding up and cross-border restructuring work.

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).

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.

Where a shareholder has redeemed his shareholding following a failed investment without objection some months prior to the initiation of a voluntary liquidation, the Court will not permit him to use the statutory deferral provisions relating to voluntary liquidations for an abusive or improper purpose. This includes using such proceedings as leverage to exert undue pressure in proposed claims against the company or directors.

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.