Given the US market’s familiarity with a Delaware LLC, it is likely that we will come to see the Cayman LLC in private equity structures going forward.

Appleby’s Subscription Finance Team considers the potential impact of the use of a Cayman LLC in the subscription credit facility and, in particular, how effective security over the capital call rights of such a vehicle might be obtained.

Currently, the typical collateral package in a subscription credit facility includes the relevant Cayman fund securing its right to make capital calls on its investors. The loan documents for these facilities typically secure the borrower’s obligations by providing for a pledge of (i) the right of the fund to make and enforce a call upon the capital commitments of investors and (ii) the account into which corresponding capital contributions are made.

As the Cayman LLC is essentially expected to be a hybrid between the ELP and a Cayman exempted company, there is much discussion as to how (i) the contractual obligations of members to fund the Cayman LLC and (ii) the security over such obligations, will be documented.

Read More

Share
Twitter LinkedIn Email Save as PDF
More Publications
8 Aug 2019 |

Summary of Economic Substance Requirements in Bermuda, the British Virgin Islands and the Cayman Islands

Economic Substance Requirements in Bermuda, the British Virgin Islands and the Cayman Islands

Contributors: Shana Simmonds
6 Aug 2019 |

Commercial Real Estate in the Cayman Islands

This Q&A published by Practical Law Real Estate Guide, gives a high level overview of the corporate ...

Contributors: Adam Johnson
16 Jul 2019 |

A Sympathetic Ear: a review of trustees’ use of the Cooper application in the Cayman Islands

The Public Trustee v Cooper application is a well-established route used by trustees who are seeking...

Contributors: Esmond Brown
12 Jul 2019 |

Recent amendments to the Cayman Islands Securities Investment Business Law

On 18 June 2019 certain key changes to the regulatory framework and ongoing filings required for per...

5 Jul 2019 |

From Legal to Compliance to Regulatory Risk – Appleby Cayman can help your business

Our multi-disciplinary teams of lawyers, IT security experts and crisis management and risk professi...

26 Jun 2019 |

Regulatory Headwinds

Faced with increased scrutiny from regulators on both global and jurisdictional levels, businesses m...

Contributors: David Dorgan