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The use of a co-obligor structure is a clever artificial legal contrivance to transfer claims into a single entity which effects a compromise through a scheme of arrangement. With recent (but not necessarily pioneering) judicial approval by Mr Justice Zacaroli in the English High Court the case of Re Gategroup Guarantee Limited, it is worth considering the use of co-obligor structures in more detail for use in offshore restructurings. It should be noted that the restructuring in that case was by way of a plan of arrangement under the new English Part 26A of the 2006 Act, implemented by the Corporate Governance and Insolvency Act 2020, where cross-class cram downs are available. This is not yet available offshore, but we will be blogging on whether it should be shortly.

In the recent decision of IsZo Capital LP v Nam Tai Property Inc, Justice Jack of the BVI Commercial Court held that a private placement was made for an improper purpose; principally to defeat a validly issued requisition for a shareholders’ meeting. The Court held that the placement was void, and ordered re-institution of the shares to their pre-placement value.

In a recent case before the Grand Court of the Cayman Islands, In the Matter of Midway Resources International, Justice Segal granted an application to appoint “light touch” restructuring provisional liquidators (PLs) in order to assist with and facilitate restructuring negotiations, to give the company and the PLs the opportunity to stabilise the position, and to seek constructive discussions with the creditors and the funder - whose continued support was critical to the process.

Petitions filed under Section 238 of the Cayman Islands Companies Act are ultimately concerned with one thing: the fair value of shares held by shareholders who have dissented from a merger or consolidation and therefore rejected the price offered to them for their shares. The company subject to the merger contends for a lower valuation; the dissenting shareholder contends for a higher valuation; expert valuation evidence is adduced; the Court, with the assistance of the experts, arrives at a fair value figure.

In the recent case of Global Diversity Opportunity & Anr v The Registrar of Corporate Affairs, the BVI Commercial Court had to consider whether it could avert what it referred to as the “potentially catastrophic” consequences of two companies having been mistakenly liquidated.

In a recent decision of the English High Court (Clarke-Sullivan v Clarke-Sullivan), which will be of interest and relevance in Cayman and elsewhere, the court was tasked with construing a will (the Will) and its effect in circumstances where the deceased (the Deceased) was very sadly killed in an avalanche while skiing and the Will provided that the residuary estate was to go to a New Zealand discretionary trust (the Trust) which had subsequently been wound up.