On 22 July 2022, the English High Court sanctioned Houst Limited’s (“Houst” or the “Company”) restructuring plan (the “Restructuring Plan”), which significantly, is the first time a Restructuring Plan has been used to cram down HM Revenue & Customs (“HMRC”) as preferential creditor.1
Background
The much-anticipated and welcome reforms to the Cayman Islands restructuring and insolvency legislation will come into force on 31 August 2022.
Overview
In a recent decision of the Grand Court of the Cayman Islands (the “Court”) concerning a supervision order in respect of a Cayman company in voluntary liquidation, Kawaley J considered the settled principles in a solvent Cayman Islands liquidation involving a dispute as to the identity of the official liquidators to be appointed.
The Proceeding
Journal of Corporate Renewal 16 June 2022 EUROPEAN Restructuring Outlook: CONSIDERATIONS FOR LENDERS BY TAYYIBAH ARIF, COUNSEL & OLA MAJIYAGBE, ASSOCIATE, DECHERT LLP As Europe prepared to emerge from the COVID-19 pandemic and navigate the resultant uncertain economic environment, Russia invaded Ukraine in February 2022, plunging the continent into disarray once again. The unprecedented pandemic followed on the heels of Brexit, which itself will have lasting impact on the region.
Executive Summary
Where multiple Cayman Islands entities in the same corporate structure become subject to insolvency proceedings (e.g. Cayman Islands master/ feeder fund structures), the Cayman Islands Courts will typically seek to appoint the same liquidators at each level where such entities share similarities in circumstances. Doing so typically aligns with the Overriding Objective of the Court to deal with matters economically and efficiently, and in the context of a liquidation, helps protect the interests of stakeholders in the liquidation.
Legislative reforms to Part V of the Cayman Islands Companies Act will shortly be coming into force which will, amongst other things, introduce a new restructuring officer regime available to certain debtors in financial distress.
Global Perspectives on Insolvency, Restructuring & Dispute Resolution
As primarily offshore lawyers, we speak on a daily basis with onshore counsel, banks, asset managers, trustees, corporates, insolvency practitioners and individuals around the world. Those conversations give our Global Insolvency & Dispute Resolution Practice Group a unique perspective on the different market trends and their regional impact in 2022.
Creditors seeking to enforce an undisputed debt against a solvent foreign non-Hong Kong company in the courts of Hong Kong will welcome the recent judgment of the Court of Final Appeal (CFA) in Shandong Chenming Paper Holdings Limited v Arjowiggins HKK 2 Limited [2022] HKCFA 11, as the CFA helpfully backs a broader and more commercially holistic interpretation of a key tenet relating to how Hong Kong courts approach certain threshold assessments involving winding up petitions brought by creditors in Hong Kong against foreign incorporated companies.
When a Cayman Islands company is in official liquidation, no proceedings or claims can be commenced against the company without the Cayman Court's permission. This requirement serves as a safeguard for the liquidation estate of the company in liquidation from being unnecessarily depleted at the expense of stakeholders of the liquidation.
On 26 April 2022, Chief Justice Smellie QC in Re Premier Assurance Group SPC Ltd. (in Official Liquidation) sanctioned a decision by the joint official liquidators (“JOLs”) of Premier Assurance Group SPC Ltd (in Official Liquidation) (the “Company”) to return (or procure the return of) certain payments held by or on behalf of the Company referable to one of its segregated portfolios, Premier Assurance Segregated Portfolio (“PASP”), to the respective payors on the basis that such sums were paid by mistake.