When a corporate borrower faces financial difficulties, there are a variety of enforcement, restructuring and insolvency options available to creditors. From a creditor’s perspective, the choice of procedure will depend on whether the borrower has granted security. If security has been granted over the shares or the assets and undertakings of a Cayman Islands incorporated company pursuant to a Cayman Islands law governed security document, the most appropriate enforcement choice for any secured creditor may be receivership.

Global Perspectives on Insolvency, Restructuring & Dispute Resolution 

As primarily offshore lawyers, we speak on a daily basis with onshore counsel, banks, asset managers, trustees, corporates, insolvency practitioners and individuals around the world. Those conversations give our Global Insolvency & Dispute Resolution Practice Group a unique perspective on the different market trends and their regional impact in 2022.

Legislative reforms to Part V of the Cayman Islands Companies Act will shortly be coming into force which will, amongst other things, introduce a new restructuring officer regime available to certain debtors in financial distress.

On 26 April 2022, Chief Justice Smellie QC in Re Premier Assurance Group SPC Ltd. (in Official Liquidation) sanctioned a decision by the joint official liquidators (“JOLs”) of Premier Assurance Group SPC Ltd (in Official Liquidation) (the “Company”) to return (or procure the return of) certain payments held by or on behalf of the Company referable to one of its segregated portfolios, Premier Assurance Segregated Portfolio (“PASP”), to the respective payors on the basis that such sums were paid by mistake.

“the new restructuring officer regime and the other amendments to the Companies Act … address certain of the challenging issues previously experienced by practitioners with the restructuring provisional liquidation regime”

Introduction

The Cayman Islands continues to be at the forefront of developments in restructuring and insolvency law in the offshore world and one of the premier jurisdictions of choice to facilitate complex and high-value cross-border restructurings.  

The impact of Covid-19 is clearly the big talking point for 2022, with several questions arising: will new variants emerge, what steps will governments take to limit the spread, and what impact will it have on industries? To date, enforcement actions, insolvencies and restructurings have been relatively light, but with new restructuring legislation reforms on the horizon, and creditors starting to ramp up speed to enforcement, it appears likely that there will be an increase in winding up and cross-border restructuring work.

On 10 September 2021, Chief Justice Smellie QC in Re Premier Assurance Group SPC Ltd. (in Official Liquidation) sanctioned a streamlined adjudication process proposed by the joint official liquidators ("JOLs") of Premier Assurance Group SPC Ltd (in Official Liquidation) (the "Company"), circumventing the requirement for thousands of participants to lodge separate proofs of debt in an insolvent liquidation.

Grand Court confirms that Section 48 of the Trusts Act (2021 Revision) provides a statutory gateway for the approval of former liquidators' fees as statutory trustee pursuant to Order 23, rule 5 of the CWR