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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.
The need for an investigation: a freestanding basis to wind up a company?
In a recent decision of the Grand Court in Seahawk China Dynamic Fund, Justice Doyle considered whether the need for an investigation can be a self-standing ground for winding up a company. In dismissing the petition, Justice Doyle recorded his preliminary view that the need for an investigation may be a sufficient ground for winding up a company by itself, but he left the issue open for determination, suggesting that this position is not settled law in the Cayman Islands, notwithstanding prior cases on the issue. Harneys acted for the successful respondent to the petition.
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.
Cayman Court’s approach to a shareholder’s winding up petition which is in substance a dispute between shareholders
In the recent decision In the Matter of Madera Technology Fund (CI), Ltd, the Cayman Islands Grand Court considered the Court’s power to order the joinder of shareholders to a shareholder’s winding up petition and characterise the proceedings as an inter partes proceeding between shareholders of the company.
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.
Unfair family fights? Legitimate expectation and proper purpose in family businesses
In the recent judgment of Ma v Wong [2002] UKPC 14 the Privy Council unanimously dismisses the appeal against the dismissal of the unfair prejudice claim under s184I of the BVI Business Companies Act 2004, alleging breach of equitable constraints on the majority shareholders in relation to the conversion of preference shares into ordinary voting shares, changing the balance of power in the Third Respondent BVI-company (STIC), and breach of directors’ fiduciary duty in the exercise of power for an improper purpose.
Cayman Court extends protection to those who invest through nominees
In the recent decision of Re Asia Momentum Fund (SPC) Ltd. (In Voluntary Liquidation), the Grand Court of the Cayman Islands considered whether a former beneficial shareholder of a Cayman Islands company had standing to petition for the company’s winding up where its shares had been redeemed but the company had failed to pay out the proceeds of redemption.
English High Court follows BVI case, Lau v Chu, to confirm the test for just and equitable winding up
In the recent decision in Re Klimvest Plc [2022] EWHC 596 (Ch), HHJ Cawson QC, sitting as a Judge of the English High Court, ordered that the respondent company, Klimvest, be wound up on just and equitable grounds pursuant to section 122(1)(g) of the Insolvency Act 1986. In his judgment, he drew heavily on the Privy Council case of Lau v Chu [2020] UKPC 24, which reinstated the BVI Commercial Court’s first instance decision and endorsed the initial findings of Justice Kaye.
Missed understanding: BVI Court holds directors in breach of their duty to act for a proper purpose
On 17 January 2022, the BVI Commercial Court handed down judgment in Green Elite (In liquidation) v Fang Ankong et al, in which a claim for breach of directors’ duties was brought by the liquidators of Green Elite against the former directors of that company. The Court held that the directors breached the requirement under section 121 of the BVI BCA to carry out their duties for a proper purpose with the result that they were liable in restitution for certain sale proceeds received by them.
BVI decrypts the legal status of cryptoassets
In Philip Smith and Jason Kardachi (in their capacity as joint liquidators) v Torque Group Holdings Limited, the BVI Commercial Court had to determine how cryptoassets should be characterised under BVI law and it also had to consider how such assets should be treated by a liquidator in an insolvent winding up.
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