Guy Manning and Paul Kennedy, Campbells
This is an extract from the 2020 edition of the Americas Restructuring Review, published by Global Restructuring Review. The whole publication is available here.
In summary
This chapter provides an update and recap of material developments in the Cayman Islands in restructuring and insolvency over the past two years.
Christopher Harlowe and Christopher Levers, Mourant
This is an extract from the first edition of GRR's The Art of the Pre-Pack. The whole publication is available here.
The Cayman Islands has established itself as the jurisdiction of choice for financially sophisticated businesses such as hedge funds, private equity funds, special purpose vehicles and trusts that use offshore vehicles.
Adopting the analysis of the United Kingdom Jurisdictional Task Force ('UKJT") on the proprietary status of crypto currencies, a recent decision of the English High Court, AA v Persons Unknown,[1] has found that crypto assets such as Bitcoin are "property" and therefore capable of being the subject of a proprietary injunction or freezing order.
A statutory demand is a formal demand for payment of a debt made by a creditor to a debtor. It may be used as the basis for an application for a petition to wind up a Cayman company.
Service and content of Statutory Demand
The Companies Winding up Rules 2008 (as amended) provide guidance as to the form and content of a statutory demand as well as the mode of service within the Cayman Islands.
A statutory demand should be in the format of CWR Form 1 and must be signed by:
The Cayman Islands Court of Appeal has provided much needed clarification of the test for validating certain transactions by companies that are subject to a winding up petition, pursuant to section 99 of the Companies Law (2020 Revision) (the "Companies Law").
The Legal Issue of Principle
The Court of Appeal has provided much needed clarification of the test for validating certain transactions by companies that are subject to a winding-up petition, pursuant to Section 99 of the Companies Law (2020 Revision).
You can read the infographic version of our guide here.
Scheme of Arrangement (Section 86)
A Court approved compromise entered into between a company and its creditors or members or any classes of them. "Arrangement" is construed extremely broadly making a scheme a very flexible restructuring tool.
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.