In Ctrip Investment Holding Ltd v eHi Car Services Limited the Cayman Islands Court delivered a warning to shareholders seeking to use the winding up jurisdiction to advance their own individual commercial interests.

In a decision that does much to reassert legal certainty for investors in Cayman Islands funds the Cayman Islands Court of Appeal ("CICA") has overruled a decision of the Grand Court concerning the circumstances in which an official liquidator of a solvent company could rectify the register of members, in In the matter of Herald Fund SPC (in official liquidation).

Consolidated and amended insolvency and restructuring rules and regulations come into force in the Cayman Islands on 1 February 2018 (the "Amended Rules").

The Amended Rules do not represent a comprehensive overhaul of the rules and regulations but they do make a number of significant changes to the procedural aspects of Cayman Islands domestic and cross-border insolvency and restructuring legislation. These changes largely reflect and codify existing practice.

Companies Winding Up Rules

In order to prevent the expense of annual 2018 government registration fees, an appointed liquidator will be required to hold the final general meeting for a company or file the final dissolution notice for an exempted limited partnership on or before 31 January 2018.

In a decision that will reassure investors in Cayman Islands investment funds and other vehicles, the Grand Court has shown its willingness to facilitate the investigation of legitimate concerns raised during a voluntary liquidation.1

The decision is the first written ruling on the Court's power to defer the dissolution of a Cayman Islands company in voluntary liquidation under section 151(3) of the Companies Law and also considers the Court's power to bring a voluntary liquidation under the Court's supervision in the context of an investigation into possible wrongdoing.

In a ground-breaking decision for the Cayman Islands as a restructuring centre, the Cayman Islands court has handed down judgment sanctioning four highly complex inter-linked schemes of arrangement.

The schemes result in the compromise of US$3.69 billion of New York law governed debt for the Cayman Islands registered parent of the Ocean Rig group and three of its Marshall Islands incorporated subsidiaries.

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 allowed for an effective dissolution date into the next calendar year, while still avoiding the government fees for that year.

In CHC Group Ltd ("CHC") the Cayman Islands Grand Court has determined that, in certain circumstances, directors of a company can commence Cayman Islands restructuring provisional liquidation proceedings ("RPL Proceedings") without the need for a shareholders' resolution or authorisation in the company's articles of association. This decision allows greater access by companies to the Cayman Islands restructuring regime by confirming a practical solution to the so-called Emmadart issue.

As year end approaches, it is time to start planning the liquidation of Cayman Islands entities that have reached the end of their life cycle to ensure that unnecessary fees are not incurred.

The Grand Court of the Cayman Islands has held that depositor protection provisions in Cayman Islands law only apply in respect of depositors with deposits of CI$20,000 (US$24,400) or less.¹  Depositors with more than CI$20,000 on deposit do not benefit from such provisions at all, even for their first CI$20,000.  This means that, for persuasive policy reasons, the position in the Cayman Islands differs from the position in the EU under the deposit guarantee scheme.