Domestic Procedures

On 31 August 2022, the Cayman Islands restructuring officer regime came into force.[1] The regime was introduced to provide increased flexibility to implement a restructuring of Cayman Islands insolvent companies, including by providing the breathing space of an automatic moratorium that operates from the date of presentation of the restructuring petition.

The Bombay High Court recently quashed a provision of a central government office memorandum that enabled public sector banks to request issuance of look out circulars (LoCs) against wilful defaulters. In Viraj Chetan Shah v Union of India, the court held that this provision violated the fundamental right to life (Article 21) as well as the fundamental right to equality (Article 14). The government is reportedly contemplating a statutory basis for PSBs to initiate LoCs.

On 28 March 2024, the BVI Court granted the Joint Liquidators of Three Arrows Capital Ltd (in liquidation) ("3AC") sanction to make an interim distribution of up to US$100 million of 3AC's assets to its creditors in BVIHC(COM)2022/0119 Russell Crumpler and Christopher Farmer (as Joint Liquidators of Three Arrows Capital Ltd (in Liquidation)) v Three Arrows Capital Ltd (in Liquidation).

The Insolvency and Bankruptcy Code, 2016 (IBC) has been at loggerheads with the Prevention of Money Laundering Act, 2002 (PMLA) on various occasions in the corporate insolvency resolution process (CIRP) of a distressed entity. Courts and tribunals have passed varying judgments, either giving primacy to the IBC or allowing the Enforcement Directorate (ED), a functionary under the PMLA, to perform its duties irrespective of the ongoing CIRP of a company.

In a seminal judgment of the Court of Appeal of England & Wales in the case of In the Matter of AGPS Bondco plc (Adler), the Court of Appeal overturned the first instance judgment of the High Court of England and Wales sanctioning a restructuring plan between AGPS Bondco plc (Plan Company) and its creditors. In doing so, it restated and clarified the law in England & Wales insofar as it relates to restructuring plans. Post-Adler, the High Court has sanctioned a restructuring plan in the case of In the Matter of Project Lietzenburger Straße Holdco S.A.R.L.

In this article, partner Bertrand Géradin and managing associate David Al Mari from Ogier’s Restructuring and Insolvency team in Luxembourg provide a high level summary of the enforcement mechanisms related to share pledges in Luxembourg. This article first appeared in Chambers Expert Focus Guides.

Our analysis of a recent court judgment in the ongoing liquidation of the high profile crypto-asset hedge fund Three Arrows Capital is by Nicholas Brookes and Romauld Johnson, part of Ogier's BVI team representing the joint liquidators.

Read our update on crypto insolvency issues from Three Arrows, which illustrates implications of the judgment including

A Court-approved reduction of capital is one of the corporate reorganisation tools that has been successfully deployed by listed companies domiciled in the Cayman Islands in order to manage debt and liquidity.

The rights of secured creditors under the Insolvency and Bankruptcy Code, 2016 (Code) have been a matter of continuous litigation and uncertainty. Early on, the challenge presented itself when during the insolvency resolution of Essar steel (India) Ltd., the National Company Law Appellate Tribunal (NCLAT) directed the distribution of resolution plan proceeds equally amongst all classes of creditors, including financial, operational, secured and unsecured creditors.