Offshore Litigation

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Offshore Litigation

The Offshore Litigation Blog is where you will find recent case updates, offshore litigation news, offshore filings lists, interviews and even some insights into island life, written by Harneys litigators from around the world.

Contributors

Jonathan Addo
Jonathan Addo
  • Jonathan Addo

  • Partner
  • British Virgin Islands
Jeremy Child
Jeremy Child
  • Jeremy Child

  • Partner
  • London
Julie Engwirda
Julie Engwirda
  • Julie Engwirda

  • Partner
  • Hong Kong
Peter Ferrer
Peter Ferrer
  • Peter Ferrer

  • Partner
  • British Virgin Islands
Claire Goldstein
Claire Goldstein
  • Claire Goldstein

  • Partner
  • British Virgin Islands
Hazel-Ann Hannaway
Hazel-Ann Hannaway
  • Hazel-Ann Hannaway

  • Partner
  • British Virgin Islands
Nick Hoffman
Nick Hoffman
  • Nick Hoffman

  • Partner
  • Cayman Islands
Andrew Johnstone
Andrew Johnstone
  • Andrew Johnstone

  • Partner
  • Hong Kong
Paula Kay
Paula Kay
  • Paula Kay

  • Partner
  • Hong Kong
Phillip Kite
Phillip Kite
  • Phillip Kite

  • Partner
  • London
Vicky Lord
Vicky Lord
  • Vicky Lord

  • Partner
  • Shanghai
Paul Madden
Paul Madden
  • Paul Madden

  • Partner
  • Cayman Islands
Henry Mander
Henry Mander
  • Henry Mander

  • Partner
  • Cayman Islands
Ian Mann
Ian Mann
  • Ian Mann

  • Partner
  • Hong Kong
William Peake
William Peake
  • William Peake

  • Partner
  • London
Lorinda Peasland
Lorinda Peasland
  • Lorinda Peasland

  • Consultant
  • Hong Kong
Chai Ridgers
Chai Ridgers
  • Chai Ridgers

  • Partner
  • Hong Kong
Nicola Roberts
Nicola Roberts
  • Nicola Roberts

  • Partner
  • Hong Kong
Paul Smith
Paul Smith
  • Paul Smith

  • Partner
  • Cayman Islands
Andrew Thorp
Andrew Thorp
  • Andrew Thorp

  • Partner
  • British Virgin Islands
Jessica Williams
Jessica Williams
  • Jessica Williams

  • Partner
  • Cayman Islands
Jayson Wood
Jayson Wood
  • Jayson Wood

  • Partner
  • Cayman Islands

Position Paper on Parallel Schemes of Arrangement: the Harneys “Schemario Rules”

What are Schemarios? Schemarios are “scheme-scenarios” which form governing rules to establish when a parallel scheme of arrangement is necessary. We believe that the Schemarios will be helpful to practitioners of cross-border restructuring around the world. Our Schemarios illustrate how the operation of the “rule in Gibbs” can be used to distinguish between cases where further steps (in particular, a parallel scheme of arrangement) are likely to be necessary to ensure the practical effectiveness of a cross-border restructuring and those cases where such steps may not strictly be necessary for that purpose.

Ian Mann, Chai Ridgers,
Paula Kay, Phillip Kite,
Peter Ferrer, Nicola Roberts,
Nick Hoffman, Vicky Lord

The Wrecking Ball vs the Crystal Ball – planning a parallel scheme of arrangement

In the recent case of In the Matter of China Oil Gangran Energy Group Holdings Limited, the Hong Kong High Court - in an obiter dicta judgment - has noted that parallel schemes of arrangement are unnecessary if there is no dissentient creditor action in another jurisdiction which might send a wrecking ball to the scheme.

Ian Mann, Chai Ridgers,
Paula Kay, Phillip Kite,
Peter Ferrer, Nicola Roberts,
Nick Hoffman, Vicky Lord

Preserving creditor value in schemes of arrangement

In the recent decision of In the Matter of Grand Peace Group Holdings Limited, the Hong Kong Court noted obiter dicta that practitioners should, citing Re Da Yu Financial Holdings Limited, be cognisant that parallel schemes of arrangement in both the company’s place of incorporation and Hong Kong, where the offshore company is listed in Hong Kong, would seem generally to be unnecessary. Parallel schemes could result in an escalation in legal fees which is not in the interests of unsecured creditors.

Ian Mann, Katie Pearson,
Chai Ridgers, Jessica Williams

Restructuring culture needs to change – Hong Kong Court leads the way

In the recent case of In the Matter of China Bozza Development Holdings Limited, Mr Justice Harris of the Hong Kong High Court recognised a Cayman Islands light touch PL but refused to grant that PL assistance. This was because there was no viable restructuring proposal, and there appeared to be a breach of the well-established route to common law recognition and restructuring as developed in Z-Obee, in order to obtain a de facto moratorium of enforcement action by creditors in Hong Kong. The case echoes the recent “scanty in the extreme” restructuring proposal in Lamtex Holdings Limited where a similarly hopeless restructuring proposal led to the application for recognition being flatly refused. Further, the company appeared to have little regard to the interests of creditors in its proposals.

Ian Mann, Julie Engwirda,
William Peake, Katie Pearson

It’s time for offshore jurisdictions to have cross class cram downs in the restructuring toolkit

The recent case of Re Gategreoup concerned a “plan” within 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 restructuring option is not yet available offshore, but Harneys believes that it should be - by way of legislative change.

Ian Mann, Katie Pearson,
Chai Ridgers, Claire Goldstein,
Jayson Wood

Bond restructuring – overcoming structural bond impediments to effect a compromise

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.

Ian Mann, Chai Ridgers,
Katie Pearson, Claire Goldstein,
Jessica Williams, William Peake

A masterclass in “light touch” – PL restructuring proposals face scrutiny before appointment

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.

Ian Mann, Chai Ridgers,
Jayson Wood, Jessica Williams,
Lorinda Peasland

Cape Town Convention matters not a Blot for MAB Leasing Limited

As reported in our previous blog, the High Court of England and Wales made a convening order regarding the scheme of arrangement (the Scheme) of MAB Leasing Limited (the Company), a company incorporated in Malaysia as part of the group which operated Malaysian Airlines. The Company leased aircrafts under 52 lease agreements which were all governed by English law, and the scheme creditors were the lessors under those agreements.

Leona Healey, Lorinda Peasland,
Peter Ferrer, Chai Ridgers

Scheme sanction and uncompromised creditors

In a recent decision of the Grand Court of the Cayman Islands (Re Freeman FinTech Corporation Limited), Segal J provides guidance on the principles to be applied when sanctioning a cross-border scheme of arrangement and the potential impact from creditors who fall outside the jurisdiction of the court.

Jayson Wood, Chai Ridgers,
Lachlan Greig, Phillip Kite,
William Peake, Jessica Williams,
Julie Engwirda, Nicola Roberts,
Paula Kay