As year end approaches, it is time to start planning the liquidation of Cayman Islands entities that have reached the end of their life cycle, to ensure that unnecessary fees are not incurred.
This update explains the key changes in cross-border insolvency proceedings if the UK leaves the EU without a deal on 31 October 2019 (or at a later date). Importantly, a no-deal exit will impact how and where such insolvency proceedings can be raised in a post-Brexit future.
A bit of background
While the UK is still an EU Member State, EU Regulations provide a clear framework for conducting cross-border insolvency proceedings. The EU Insolvency Regulations (the 2000 Insolvency Regulation and the 2015 Recast Insolvency Regulation) include provisions which:
The liquidation of Thomas Cook Group last month – and the ensuing cancellation of all flights and repatriation of 140,000+ customers – has prompted fresh scrutiny of the UK’s approach to airline insolvency.
The Central Bank of Ireland ("CBI") issued a letter to all fund management companies on 7 August 2019 ("Letter") with a timely reminder of their ongoing obligations regarding liquidity management and compliance with legislative and regulatory obligations for UCITS and AIFs. This is in the context of the CBI's continuing engagement with industry on Brexit preparedness, and it stated it will have regard to the Letter as part of its future supervisory engagements.
Back in March, we highlighted the launch of a consultation following the UK government’s proposal to introduce a new “secondary preferential” status for HMRC. Further details of the proposal can be found here : HMRC launches consultation on new “secondary preferential” status.
The ILP is a regulated common law partnership structure which will be of significant interest to international managers marketing to EU investors and wider global markets.
The Bill seeks to introduce a number of important changes which aim to position the ILP as a leading EU fund vehicle for private equity and sustainable investments.
Although the Bill remains subject to further approval as it passes through the legislative process, this is nonetheless a very positive and welcome development.
The timing of the commencement of the voluntary liquidation of a Cayman Islands company was often driven primarily by the desire to avoid incurring the following year's annual government fees. To avoid those fees, the liquidation had to commence by December, with the final meeting being held before the end of January. This timetable resulted in an effective dissolution date into the next calendar year, while still avoiding the government fees for that year.
The Court of Appeal's recent decision in Bank of Ireland v Eteams (International) Limited brings further important legal clarity for all forms of receivables finance transactions, as well as the "true sale" opinions given by lawyers in the context of such deals.
As the insolvency profession in Scotland continues to get to grips with the new corporate insolvency rules, Re Sprout Land Holdings Ltd (in Administration) serves as a timely reminder not to forget the basics when dealing with the appointment of administrators by the directors of a company.