When a Cayman Islands company (CayCo) goes into official liquidation, various antecedent transactions entered into in the lead up to that liquidation may be set aside, thereby allowing the recovery of assets of the CayCo to maximise the return to its stakeholders. This snapshot sets out a summary of challenges that may be made to antecedent transactions in the Cayman Islands. These may also apply to Limited Liability Companies, Partnerships, Exempted Limited Partnerships and, in certain circumstances, to foreign companies, but this snapshot focuses on CayCos.
Introduction
The Grand Court has recently provided helpful clarification as to the appropriate test to be applied when a dispute arises over the identity of the insolvency practitioners proposed to be appointed by a creditor or the company. In Global Fidelity Bank Ltd (in Voluntary Liquidation)[1] the Court confirmed the 3-stage test for determining independence and that in applying the test, significant weight should be afforded to the views of the creditors.
Background
A recent matter which came before a strong Court of Appeal panel demonstrates that the BVI Court will continue to come to the aid of creditors pursuing unpaid debts and that they should not necessarily be deterred from pursuing a debt in the BVI even if the security over the debt is in issue.
This article first appeared in ThoughtLeaders4 FIRE Q1 2021 magazine.
It is important that trustees understand their obligations if their trust structure comes under financial stress. Helpfully, the Jersey courts have provided guidance on the principles applicable to 'insolvent' trusts, which is likely to be highly persuasive in other jurisdictions.
When is a trust insolvent?
This article deals with the effect on claims, both pre-litigation and post, which are driven by Credit Hire Organisations (CHOs) who are insolvent or begin an insolvency process. We have focused on practical considerations to identify such claims as well as what you will need to bear in mind when handling credit hire claims where the CHO is insolvent.
Background
There are three main strands: -
Landlords have become used to the concept of the retail CVA over the past few years, but the new post COVID-19 breed of CVAs has been pushing the boundaries as never before. Further, a new restructuring option – described by some as a “CVA on steroids” – is now available to tenants courtesy of the recently enacted Corporate Insolvency and Governance Act: the s26A Restructuring Plan. Restructuring Plans enable companies, with the sanction of the Court, to impose new terms on creditors even in circumstances where not all classes of creditor have approved the plan.