In the recent judgment In the Matter of GTI Holdings Limited delivered on 15 March 20221 , the Cayman Islands Grand Court reiterated the importance of principles of comity in cross-border insolvency matters and the central function of the place of incorporation.

A copy of the full judgment is available here. 

Background

Conyers were instructed by Silver Base Group Holdings Limited (“Silver Base”) in relation to a successful application for the appointment of “light-touch” provisional liquidators for restructuring purposes before the Grand Court of the Cayman Islands.

Introduction

In the recent judgment of In the Matter of Margara Shipping Limited (the “Margara Decision”)1 the Cayman Islands Grand Court provided some useful guidance on the basis on which a company can be restored to the Register of Companies (the “Register”) and subsequently wound up pursuant to section 159 of the Companies Act (2021 Revision) (the “Companies Act”) and the Grand Court Rules (2022 Consolidation) (“GCR”), Order 102, Rule 18.

The Legal Basis to Restore and Wind Up A Company

In the recent decision of Evergreen International Holdings Limited, delivered on 11 January 2022, the Grand Court of the Cayman Islands made an order for the immediate winding up of a company notwithstanding the company’s cross-applications for an adjournment of the winding up petition and the appointment of “light-touch” provisional liquidators for restructuring purposes. The Court dismissed the company’s cross-applications on the basis that there was no credible evidence which supported the company’s assertion that a viable restructuring was imminent. 

On 27 May 2022, the Honorable Mr. Justice Harris sanctioned a scheme of arrangement introduced by Rare Earth Magnesium Technology Group Holdings Limited, which was incorporated in Bermuda, to restructure its debt. The Reasons for Decision handed down on 6 June 2022 contain detailed discussions on, among other things, the use of schemes in cross-border insolvencies.

Introduction

Through the EU Directive on Restructuring and Insolvency of 20 June 2019 (EUR 2019/1023, “Directive“), the European Union has imposed an obligation on its member states to offer a more attractive and flexible restructuring scheme in their respective local law. The initial deadline to do so had been 17 July 2021. Only a handful of countries (most notably Germany and The Netherlands) had implemented the Directive within the initial deadline, whilst the other countries made use of the possibility to ask for a one year extension.

Introduction

In brief

On 6 May 2022, the Honorable Madam Justice Linda Chan granted a petition for the winding-up (in Hong Kong) of Up Energy Development Group Limited, which was incorporated in Bermuda.

In brief

Snapshot on the status of implementation of the EU Restructuring Directive in selected Member States and the new English scheme

Introduction

The Russian government has introduced a bankruptcy moratorium with effect from 1 April to 1 October 2022 in respect of all Russian legal entities and individuals (“Persons“) except for certain residential real estate developers.

The moratorium is intended to protect Russian debtors against creditors’ claims and provide support for players on the Russian market given the challenging environment they operate in.

The key consequences of the introduction of the moratorium regime are as follows: