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. 

When entertaining a jurisdictional challenge to wind-up a foreign company with no place of business in Hong Kong, is it a material concern that alternative remedies for unfair prejudice are available at the company’s place of incorporation but not in Hong Kong (“Question”)?

The government's response to the recent Insolvency and Corporate Governance Consultation has increased the emphasis on flexibility and the restructure and rescue of businesses. However, along with the recent October Budget, there are proposed reforms which are set to increase the focus and accountability for directors of companies.

Preliminary Moratorium

One of the key new proposals to be introduced with the aim of rescuing companies is a "Preliminary Moratorium".

The Dutch Supreme Court has confirmed the decision of the Amsterdam Court of Appeal, which found that the bankruptcy of the Russian based oil company, Yukos, could not be recognised in the Netherlands because it violates Dutch public policy.

The High Court of Hong Kong refused to allow a Chapter 11 Trustee to disclose a Decision from Hong Kong winding up proceedings in the US bankruptcy court. The US proceedings were commenced to prevent a creditor from taking action following a breach of undertakings given to the Hong Kong court in circumstances where the company had no jurisdictional connection with the US.

The Australian Federal Court has clarified the limitations for foreign entities and their office holders in pursuing action in Australia to access the voidable transaction provisions of the Australian Corporations Act.

In August 2018 we reported on the TCC decision of Fraser J in the case of Michael J. Lonsdale (Electrical) Limited v Bresco Electrical Services Limited (in Liquidation) [2018] EWHC 2043. See our previous article here. Following an appeal by Bresco, the case has recently been heard by the Court of Appeal.

TCC decision

Control to Serbian Creditors- the amendments to the Serbian Insolvency Act

The recent amendments to the Serbian Insolvency Act enacted 9 December 2018 have placed more control into creditors’ hands allowing them to suggest the insolvency administrator to be appointed, as well as providing less restrictive provisions on the proposers of reorganisation proposals.