Regulatory Disputes Lawyers

Avoiding The Nuclear Option: Buyout Orders In Just And Equitable Winding Up Proceedings

With the Cayman Islands being a preferred jurisdiction for the incorporation of investment vehicles, inevitably cases will arise where non-controlling shareholders complain that they are being unfairly prejudiced by conduct of those in control, and necessarily pursue those complaints by way of proceedings to wind up the subject company on the just and equitable ground. Where such complaints are well-founded, the outcome will often be an order putting the subject company into official liquidation.  But the Cayman courts also have the jurisdiction in such cases to make a range of other orders as alternatives to taking that nuclear option, and are indeed obliged to consider whether any of those alternative orders would provide a more appropriate solution to the complaints.[1] The Grand Court was recently required to conduct that analysis in the case of Re Position Mobile Ltd SEZC.[2]  The petitioning shareholder in that case had satisfied the Court that it would be just and equitable to wind up the company – since it had justifiably lost confidence in the probity of those in control, due to their serious and sustained misconduct and mismanagement – but positively sought a buyout order[3] as an alternative to a winding up.  The Court thus proceeded to consider whether the buyout order, or any other alternative order, would be more appropriate than ordering a winding up, and concluded that a buyout order was the fairest and most appropriate form of relief in the circumstances of that case. The authors will discuss the guidance which the Position Mobile case provides in that regard below, which should be considered together with the guidance provided by Re Madera Technology Fund (CI) Ltd,[4] particularly in respect of the approach that the Cayman courts can be expected to take when setting the appropriate valuation date for a buyout order, with a view to ensuring that the valuation is fair to each side.[5] [1] See Re Virginia Solution SPC Ltd (unrep. 28 July 2023, CICA) at [61]. [2] [2026] CIGC (FSD) 10 [3] Requiring the respondent shareholders to purchase its shares at a fair price. [4] (unrep. 21 Aug. 2024, Richards J). [5] For further detail, see the authors’ article on the Madera Technology case at https://www.applebyglobal.com/publications/no-looking-back-investor-held-to-buyout-at-current-value-of-shares/.

Andrew Jackson

2026 Guide to Asset Tracing and Recovery in the Cayman Islands

This country-specific Q&A provides an overview of Asset Tracing & Recovery laws and regulations applicable in the British Virgin Islands.

Daniel Mitchell, Tamara Cameron, Dave Marshall

2026 Guide to Asset Tracing and Recovery in the Cayman Islands

This country-specific Q&A provides an overview of Asset Tracing & Recovery laws and regulations applicable in Cayman Islands.

Harriet Ter-Berg, Alan Bercow, Jae Shin, Róisín Cottrell

Bermuda: Asset Tracing and Recovery

This country-specific Q&A provides an overview of Asset Tracing & Recovery laws and regulations applicable in Bermuda.

John Wasty, Claire van Overdijk KC, John Riihiluoma, James Batten, Robert Nash

Purpose trusts: Bermuda’s answer to modern asset structuring

Purpose trusts represent a notable development in modern trust law, particularly within offshore financial jurisdictions such as Bermuda. Unlike traditional private trusts, which are established for the benefit of identifiable beneficiaries, purpose trusts are created to achieve specific objectives or purposes. Historically, common law jurisdictions were reluctant to recognise such arrangements due to the absence of beneficiaries capable of enforcing the trust. However, legislative reforms in Bermuda have significantly expanded the scope of trust law by expressly validating noncharitable purpose trusts. Through the enactment of the Trusts (Special Provisions) Act 1989 (‘the 1989 Act’), Bermuda introduced a statutory framework that allows trusts to exist for defined purposes, provided certain legal requirements are satisfied. This innovation has made Bermuda a leading jurisdiction for the establishment of purpose trusts, particularly in the fields of international finance, corporate structuring and private wealth management. This article examines the legal foundations of purpose trusts under Bermuda law, focusing on their historical development, statutory framework, requirements for validity, enforcement mechanisms and practical applications.

Claire van Overdijk KC, Mike Goulborn

International Disputes and Insolvency Lawyer Daniel Burkitt Joins Appleby Bermuda as Partner

Daniel Burkitt, John Wasty