Analysis: Cayman Islands Restructuring: Cross-Class Cramdowns and Competing Valuations

On 21 April 2023, the English High Court handed down its written reasons for sanctioning the Adler Group restructuring plan proposed under the new Part 26A regime of the UK's Companies Act 2006, which raised questions regarding the jurisdiction of the Court, cross-class cramdowns, pari passu issues and competing valuations, Mondaq reported. Following the introduction of a new restructuring regime in the Cayman Islands this analysis delves into the ramifications of the recent Adler Group decision and its potential impact on further revisions to the Cayman Islands' Companies Act. The Adler Group, a prominent German property group owning a rental property portfolio valued at c.?8 billion, faced myriad liquidity challenges following the impact of ratings downgrades, regulatory/bondholder scrutiny and short-selling pressure. The Adler Group had six series of unsecured notes maturing in 2024, 2025, 2026, 2027, 2028 and 2029 (the "Notes"). One of the Adler Group's subsidiaries had Notes with a maturity date of 27 April 2023, which it was not going to be able to meet and was likely to trigger default of the Notes under their various covenants.  Following an unsuccessful attempt to implement a restructure contractually with the Noteholders, the Adler Group incorporated a new company under English law and substituted that new company as the issuer of the Notes in order to launch a restructuring plan under Part 26A of the Companies Act 2006. Read more.