Introduction Of The New Cayman Islands Restructuring Officer Regime
Published date | 05 August 2022 |
Subject Matter | Corporate/Commercial Law, Insolvency/Bankruptcy/Re-structuring, Financial Restructuring, Corporate and Company Law, Directors and Officers, Insolvency/Bankruptcy, Shareholders |
Law Firm | Walkers |
Author | Walkers   |
-The much-anticipated and welcome reforms to the Cayman Islands restructuring and insolvency legislation will come into force on 31 August 2022.
These important amendments to Part V of the Cayman Islands Companies Act ("Companies Act") will introduce a new restructuring officer regime available to companies in financial distress, which can be accessed without the need to present a winding up petition to the Grand Court of the Cayman Islands (the "Cayman Court"). Upon filing the application seeking the appointment of restructuring officers, companies will be able to obtain an immediate and standalone restructuring moratorium on unsecured creditor action which will have extraterritorial effect (as a matter of Cayman Islands law), within which a restructuring may be proposed and implemented.
The key features of the new restructuring regime will be as follows:
- Companies may present a petition to the Cayman Court seeking the appointment of a restructuring officer on the grounds that: (i) the company is or is likely to become unable to pay its debts; and (ii) intends to present a compromise or arrangement to its creditors (or classes thereof) either, pursuant to the Companies Act (such as by way of a Cayman Islands scheme of arrangement), a foreign law or by way of a consensual restructuring.
- The petition seeking the appointment of a restructuring officer may be presented by the directors of a company: (i) without a shareholder resolution and/or an express power to present a petition in its articles of association; and (ii) without the need to file a winding up petition as a prerequisite.
- A standalone restructuring moratorium on unsecured creditor action will automatically arise on filing the application seeking the...
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