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Offshore Litigation Blog

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Green Asia Restructure Fund SPC - The challenge of insolvent portfolio companies
In the recent decision in Re Green Asia Restructure Fund SPC, the Grand Court of the Cayman Islands considered an application by a creditor for the appointment of receivers to the portfolios of a Segregated Portfolio Company (more commonly referred to as an SPC) on the grounds of their insolvency. The decision highlights some of the practical difficulties that creditors of a portfolio of an SPC face when seeking to have the portfolio wound up.
English cram downs - Attempts artificially to create an in-the-money class to be avoided
In Houst Limited [2022] EWHC 1941 (Ch) Mr Justice Zacaroli approved a plan of arrangement under Part 26A of the English Companies Act 2006 cramming down the HM Revenue and Customs (HMRC) who objected to the plan. English cases are of interest since they are persuasive in the offshore jurisdictions. Harneys believes that cram downs, if implemented by future legislative change, would make a positive contribution to offshore restructuring.
Shareholder ratification of breaches of directors’ duties: The Duomatic principle and insolvency
In the recent decision of Re Mobigo Ltd (In Liquidation) [2022] EWHC 1349 (Ch), the English High Court considered whether a company’s directors could avail themselves of the Duomatic principle to defeat a claim brought against them by the company’s liquidator in respect of their pre-liquidation conduct. The Duomatic principle forms parts of the laws of the Cayman Islands, the British Virgin Islands, and Bermuda, and accordingly the decision will be of interest to stakeholders of companies incorporated in these jurisdictions. Further, the factual matrix involves alleged breaches of directors’ duties which will be very familiar to off shore practitioners and therefore makes this an interesting judgment for this readership to reflect on.
Cayman Islands Court considers when a secured creditor can sue debtor company in liquidation
In the recent decision of Re Adenium Energy Capital, Ltd. (In Official Liquidation), the Grand Court of the Cayman Islands considered the circumstances in which its permission was required for the pursuit of legal proceedings against a company in liquidation.
Riding the waves of recognition
Two recent Hong Kong liquidation cases applied for recognition and assistance in Mainland China under the Mutual Recognition and Assistance related to Insolvency Proceedings between the Courts of the People’s Republic of China and the Hong Kong SAR (the Cooperation Mechanism). Harneys reported on the unveiling of the Cooperation Mechanism on 14 May 2021.
Schemes of arrangement - a real (estate) restructuring tool for financially distressed BVI companies
A scheme of arrangement is a statutory tool available to BVI companies, which, if sanctioned by the Court, enables the implementation of a debt restructuring plan that has been approved by the prescribed percentage of creditors. As many Chinese real estate companies look to restructure, RongXingDa Development (BVI) Limited, a member of the RiseSun Real Estate Development Co. Ltd group, recently obtained sanction from the Court for a scheme of arrangement and avoided liquidation.
AHAB v Saad – Judgment delivered on AHAB’s appeal
The Cayman Islands Court of Appeal (CICA) has handed down its long-awaited judgment in the landmark case of AHAB v SICL & Others. In the latest chapter of the Saad story, the CICA overwhelmingly endorsed the Chief Justice’s Grand Court decision to dismiss AHAB’s claims, finding in favour of the Defendants / Respondents on the majority of the key issues, in particular the issues of knowledge and authority on the part of the plaintiffs of what was described at first instance as a “cauldron of a fraud”. Harneys acts for the Joint Official Liquidators of SIFCo5.
Rule in Gibbs applied: Recognition of Singapore moratoria denied in Scotland
In the recent Scottish case of Chang Chin Fen v Cosco Shipping (Qidong) Offshore Ltd, the Outer House of the Court of Session refused petitions brought by debtor companies under the Cross-Border Insolvency Regulations, 2006 to, amongst other things, recognise moratoria obtained in the Singapore High Court on the basis that to do so would prejudice the rights of a creditor to claim under its English-law governed debt, which stood outside the proposed Singapore schemes.
Recognition of foreign “light touch” provisional liquidations affirmed once again by the Hong Kong Court
The recent judgment of Mr Justice Harris in In Re China Oil Gangran Energy Group Holdings Limited (In Provisional Liquidation) recognising the appointment of “light touch” provisional liquidators in the Cayman Islands, is the latest in the growing body of Hong Kong jurisprudence confirming the willingness of the Hong Kong Court to recognise the appointment of foreign provisional liquidators for restructuring purposes, despite the fact that Hong Kong has no legislation that provides for such a restructuring.
Cayman Islands – insolvency and segregated portfolios – Grand Court gives new guidance
In the recent Grand Court case of Re Obelisk Global Fund SPC, Justice Parker has considered, for the first time, the correct insolvency test to be applied for the court appointment of a receiver over a segregated portfolio.
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