In January 2018 the District Court sentenced a company in liquidation that had once been Cyprus's biggest grocery retail company.(1) The sentence concerned the issuance of a cheque with insufficient funds.
In 2016 members of Parliament (MPs) proposed legal reforms with the aim of regulating the procedure for the appointment of receivers by debenture holders. Although debate on the issue stopped for a period, it recently re-emerged in vigorous form following the sale of hotel units by receivers who had been appointed by financial institutions pursuant to a floating charge.
Securitisation involves transactions that enable a lender or a creditor – typically a credit institution or a corporation – to refinance a set of loans, exposures or receivables, by transforming them into tradable securities accessible by investors.
The statutory framework regulating the purchase and sale of credit facilities in Cyprus was amended as part of an overhaul of the insolvency framework. The 2018 amendments sit alongside a new securitisation framework.
This note highlights the key aspects of the Purchase and Sale of Credit Facilities and Relevant Matters Law of 2015, as amended in 2018 (the “Law”).
What credit facilities are caught?
Introduction
In the English case of Derby& Co v Weldon (No3 and 4) (1990) Ch 65, the Court of Appeal held unequivocally that a court can order a defendant’s assets to be frozen even if they are situated outside of the jurisdiction. However what is vital to be established in such circumstances is:
The Cyprus Companies Law, Cap. 113 provides three methods for winding-up a Cyprus company:
- voluntary winding-up (either by the members or by the creditors);
- involuntary winding-up by its creditors; and
- voluntary winding-up by the Court or winding-up subject to the supervision of the Court
An alternative way for a company to cease to exist, is by way of striking-off of the Register of Companies, in accordance with section 327 of the Companies Law (Cap. 113).
BAIL-OUT DÉJÀ-VU
Introduction The purpose of this note is to provide an update on the current position regarding the capital controls and restrictions as currently applicable in Cyprus.