Companies incorporated in the Cayman Islands usually conduct operations and hold assets elsewhere than in the Cayman Islands and Cayman Islands corporate insolvencies therefore commonly have a significant international dimension. Corporate insolvencies are conducted under the supervision of the Financial Services Division of the Grand Court of the Cayman Islands and the requirements of Cayman law mean that the insolvency practitioners (the liquidators) require court approval (‘sanction’ in the language of the statute) before they can take certain significant steps in the liquidation.

Those steps include: bringing and defending legal proceedings, carrying on the corporate business, making compromises or arrangements with creditors and compromising claims. Another feature of Cayman corporate insolvencies is the liquidation committee: a committee of creditors must be established in respect of every insolvent company being wound up by the court. The liquidators must report to the members of the committee and when the liquidators require sanction the members of the committee are entitled to be heard on the application for sanction. A recent decision In the matter of PAC Ltd (in official liquidation)shows that these features of liquidations in the Cayman Islands can be used to provide an opportunity for creditors based overseas to play an informed and potentially decisive role in important decisions in the liquidation.

Type

Insight

Locations

Cayman Islands

Share
Twitter LinkedIn Email Save as PDF
More Publications
1 Jun 2022

The 2022 Cayman Islands Real Estate Guide

The Real Estate 2022 guide provides the latest legal information on the impact of disruptive technol...

Contributors: Norman Klein
28 Apr 2022

Restructuring the offshore debt of Chinese Real Estate Developers

This article sets out how the current regimes in the Cayman Islands and the BVI can assist with rest...

Contributors: Crystal Au-Yeung
28 Apr 2022

Assignment, novation or sub-participation of loans             

Transfers of loan portfolios between lending institutions have always been commonplace in the financ...

26 Jan 2022

Appleby contributes four chapters to Global Legal Insights – Fund Finance 2022: Cayman Islands

2021 has been an incredibly impressive year for the global subscription credit and fund finance mark...

Contributors: Georgina Pullinger
27 Oct 2021

We hope this registers! A summary of Cayman corporate and partnership registers in a finance transaction.

Because we know that it can be a little befuddling, Appleby has set out a guide to the various Cayma...

7 Oct 2021

Regulatory Round-Up: Cayman Islands Q3 2021

Appleby Cayman’s Our latest Regulatory updates for the Cayman Islands up to Q3 2021.

13 Sep 2021

Loans & Secured Financing in the Cayman Islands 2021

First published in Getting the Deal Through 2021. This practice guide provides topical analysis of L...

Contributors: Alexandra Simpson
21 May 2021

2021 - A Jekyll and Hyde Year for SPACs

In this article we offer our views on why this has happened and look ahead to the future for SPACs a...

Contributors: Dean Bennett
13 May 2021

The 2021 Cayman Islands Real Estate Guide

The Real Estate 2021 guide provides the latest legal information on the impact of disruptive technol...

Contributors: Norman Klein
13 May 2021

British Virgin Islands: Mergers & Acquisitions Comparative Guide

This country-specific Q&A provides an overview to Mergers & Acquisitions laws and regulati...

Contributors: Brittany Cummings