Domestic Procedures
What are the principal insolvency procedures for companies in your jurisdiction? | Liquidation: voluntary and official. Cayman does not have an equivalent to the English concept of the company administration or to the Chapter 11 process in the United States. Schemes of Arrangement/“Soft Touch Liquidations” allow the company to enter into an agreement with its shareholders and/or creditors. |
International guidelines on cross-border insolvency matters have recently been adopted by the BVI courts. The Judicial Insolvency Network guidelines – drafted in 2016 by ten insolvency judges from international jurisdictions, including a BVI Commercial Court Judge – aim to create co-operation and communication between courts on cross-jurisdiction proceedings, and to minimise the time and expense involved in litigation.
The adoption of new international guidelines on cross-border insolvency matters by the BVI courts has been welcomed by Ogier insolvency law specialist Nicholas Brookes.
The Judicial Insolvency Network guidelines – drafted in 2016 by ten insolvency judges from international jurisdictions, including a BVI Commercial Court Judge – aim to create co-operation and communication between courts on cross-jurisdiction proceedings, and to minimise the time and expense involved in litigation.
The UNCITRAL Model Law on Cross-Border Insolvency is designed to supplement States' insolvency laws with a framework to address cross-border insolvency proceedings.
The Facts
The case concerned an application made by the Liquidators of a BVI incorporated company, Peak Hotels and Resorts Limited ("Peak"). The application was intended to determine the effectiveness of a charge granted by Peak to Candey Limited, Peak's former solicitor.
Peak was the holding company of a joint venture vehicle that became the subject of lengthy international litigation proceedings following the breakdown of relations between the joint venture partners and shareholders. Candey acted for peak in the litigation.
This recent decision on a jurisdictional challenge has provided greater clarity and potentially created a tortious cause of action where a debtor dissipates assets prior to judgment and subsequent freezing order.
Background
Further to our update in November 2014, there has been a further decision in relation to Fairfield Sentry Limited, the largest feeder fund that invested into the fraudulent Bernard L. Madoff Investment Securities.
The US Bankruptcy Court for the Southern District of New York has dismissed a case filed under Chapter 15 of the US Bankruptcy Code as the debtor's centre of main interest ("COMI") was not in the jurisdiction where the initial Liquidation was filed.
Creative Finance Ltd was incorporated in the British Virgin Islands in 1995. However the Company's main trade occurred in England, Dubai and Spain. In December 2013 the Company filed for Liquidation in the BVI, being its place of incorporation, and a Liquidator was duly appointed.
It’s been a hard year for cryptocurrency. The values of most cryptocurrencies, including major coins such as Bitcoin and Ethereum, have continued to tumble. In fact, the price of one stablecoin, which is a form of cryptocurrency tied to another currency, commodity or financial instrument, de-pegged from its cryptocurrency token and entered into a downward spiral. Ultimately, the stablecoin and the crypto token it was pegged to collapsed, erasing $18 billion of value with it.
Introduction
Although the sum involved was small, the High Court’s decision inOne Investment and Consultancy Limited and another v Cham Poh Meng (DBS Bank Ltd, garnishee) [2016] SGHC 208 is one which would have a great impact in the area of enforcement of a judgment debt – A joint account held in the names of a judgment debtor and third parties jointly cannot be subject to attachment under a garnishee order.