Domestic Procedures
What are the principal insolvency procedures for companies in your jurisdiction? | Liquidation: voluntary and official. Cayman does not have an equivalent to the English concept of the company administration or to the Chapter 11 process in the United States. Schemes of Arrangement/“Soft Touch Liquidations” allow the company to enter into an agreement with its shareholders and/or creditors. |
In a last Amerind-tinged gift before Christmas, the High Court has today handed down another judgment on an issue which lies at the intersection between insolvency law and trust law, although this time in the bankruptcy context. It is the latest in a string of unfolding legal developments at this intersection, including the High Court’s decision in June in Amerind and the Full Federal Court’s decision last year in Killarnee.
Do you have Cayman vehicles that you are considering terminating?
If so, you should consider initiating the process now to minimise or eliminate 2020 annual fees. This note contemplates corporate vehicles but similar considerations apply to partnerships.
Termination by voluntary liquidation
What is the Guernsey solvency test?
The solvency test, found in section 527 of the Companies (Guernsey) Law 2008 as amended ("the Law"), is used to determine whether a Guernsey company is solvent. For non-regulated companies, it is a two-part test. For regulated companies there is a third part to the test[1] which concerns compliance with the solvency requirements imposed by their specific regulatory regimes. The test is cumulative, meaning that a company is insolvent if it fails any applicable part of the test.
Cash flow solvency
Just a note to alert readers that the latest decision of interest in this post-Amerind world dropped today in the Federal Court in Queensland. The liquidators of an insolvent corporate trustee successfully obtained orders appointing them receivers of the assets of two trusts to enforce the rights of exoneration and liens of the former trustee. The application was contested by the new trustee of the property trust, who sought to sell the key asset itself (a hotel – freehold title to the land).
You can read the infographic version of our guide here.
Scheme of Arrangement (Section 86)
A Court approved compromise entered into between a company and its creditors or members or any classes of them. "Arrangement" is construed extremely broadly making a scheme a very flexible restructuring tool.
Each year, legal disputes over assets worth billions of dollars worldwide are resolved in courtrooms and boardrooms in the Cayman Islands. The jurisdiction has a reputation for dealing with complex financial services and commercial litigation based on:
Recently the Victorian Court of Appeal upheld a decision to deny liquidators approval of a proposed settlement in McDermott and Potts as liquidators of Lonnex Pty Ltd (in liquidation) [2019] VSCA 23. The creditors had been opposed to the settlement.
Background
Background
So what precisely is an asset protection trust and what is it, over and above a normal trust that an asset protection trust is seeking to achieve? This paper considers these issues from a Jersey law perspective and fundamentally asks the question to what extent a Jersey trust, once established, will protect assets from creditor claims.
This Monday 5 February 2019 is shaping up to be a pretty big day. As has been well covered in the press, the final report by of the Banking Royal Commission has now been handed to the Governor-General and will be publicly released on Monday afternoon at 4.10pm, coinciding with the sharemarket close. Reportedly Commissioner Kenneth Hayne’s final report stretches to more than 1000 pages.