In Huff Energy Fund v. Gershen, C.A. No. 11116-VCS, the Delaware Court of Chancery dismissed a stockholder’s challenge to the board of director’s decision to dissolve the company following an asset sale. The Court ruled that the enhanced scrutiny standards of Revlon and Unocal do not supplant the business judgment rule in the context of a company’s decision to dissolve.

In Re Hin-Pro International Logistics Ltd, CACV 54/2016, the Court of Appeal upheld the Court of First Instance (CFI) decision that the courtdoes have jurisdiction to grant leave to amend a creditor’s winding-up petition, to include debts accruedafter its presentation. The company had been granted leave to appeal the CFI decision to enable the Court of Appeal to consider whether the rule in Eshelby v Federated European Bank Ltd [1932] 1 KB 254 (the Eshelby Rule), still applied.

This is the second in a series of articles highlighting the changes to be brought in by the Companies (Winding Up and Miscellaneous Provisions) (Amendment) Ordinance 2016 (Amendment Ordinance), which was gazetted on 3 June 2016 and will come into effect on a date to be appointed by the Secretary for Financial Services and the Treasury.

The Companies (Winding Up and Miscellaneous Provisions) (Amendment) Ordinance 2016 (Amendment Ordinance), gazetted on 3 June 2016, will come into effect on a date to be appointed by the Secretary for Financial Services and the Treasury. It amends the Companies (Winding Up and Miscellaneous Provisions) Ordinance, Cap 32. This article is the first in a series, highlighting the major changes to be introduced.

Aims of Amendment Ordinance

The Amendment Ordinance aims to:

When Cayman Islands funds undergo liquidity stress on their balance sheet due to holding illiquid assets or irregular large redemption requests, directors of Cayman Islands funds generally consider mechanics to provide for an orderly restructure to meet redemption requests which arise. Common arrangements are to implement a “redemption gate” which limits redemptions to a certain percentage of shares in the fund or a stronger response such as a suspension of all redemptions.

The Third Party (Rights Against Insurers) Act 2010 (the “2010 Act”) finally comes into force on 1 August 2016.

The 2010 Act makes it easier for a third party to bring a claim against an insurer when the insured party has become insolvent. The 2010 Act will replace the Third Parties (Rights Against Insurers) Act 1930 (the “1930 Act”) and is designed to extend and improve the rights of third party claimants.

Policyholders contemplating insurance coverage settlements with low-level insurers should use caution to preserve their ability to access higher-level excess policies. Excess insurers are increasingly disputing that underlying policies are properly exhausted where policyholders elect to settle with underlying insurers for less than full limits. The issue can be further complicated if the policyholder seeks protection under the bankruptcy laws against long-tail liabilities, as a recent case illustrates.

Earlier this year, both the lower and upper houses of Malaysia’s parliament, passed the Companies Bill 2015 (“theBill”) which will harmonise Malaysia's insolvency laws and bring them more in line with modern international standards. Once the Bill comes into effect (it is currently awaiting Royal Assent), it will replace Malaysia’s existing Companies Act 1965.

Under the Bankruptcy Ordinance (Cap. 6) (“BO”), a person who has been adjudged bankrupt will be entitled to be discharged from bankruptcy four years after the making of the bankruptcy order, unless it is a second bankruptcy or the period is extended by the Court. The maximum extension is an additional four year period.

Section 42 of the Bankruptcy Ordinance (Cap. 6) (“BO”) provides that where a person is adjudged bankrupt, any disposition of property made by that person from the date of presentation of the bankruptcy petition is void unless made with the consent of the Court or unless subsequently ratified by the Court. The purpose of this section is to prevent the improper dissipation of the bankrupt’s assets once a bankruptcy petition is filed and to protect the principle of pari passu distribution.