While the outcome was relatively straightforward on the facts, the judgment provides much-needed guidance concerning the grounds that the Court will consider when determining whether to continue the appointment of ROs given it is the first judgment to consider the issue.

On 5 December 2025, ROs were appointed to develop and implement a restructuring plan for the Company and its wider corporate group to avoid a potentially insolvent liquidation. Upon appointing the ROs, the Court also directed that a case management conference be scheduled to assess progress with the restructuring plan.

By the hearing on 3 March 2026, the ROs had made some progress developing a restructuring plan but had not yet obtained agreement from key stakeholders. Given liquidity pressures faced by the Company, the ROs advised the Court that they intended to pursue interim financing to stabilise the Company while continuing to pursue a longer-term restructuring of its debt. In this context, Justice Asif KC considered whether it was appropriate for the ROs’ appointment to continue.

As noted by Justice Asif KC, the judgment addresses interesting jurisdictional questions about the nature of the enquiry the Court must undertake when reviewing the continuation of RO appointments as there was previously no authority that directly addressed the Court’s supervisory jurisdiction.

The Court first considered the judgment of Kawaley J in Re Holt Fund SPC  which dealt with an application to discharge ROs and records that where a consensual restructuring is no longer viable, the ROs will have grounds for their removal. Conversely, the potential for a viable restructuring must exist for the appointment of ROs to continue as detailed below.

The Court accepted that the dicta  of Cresswell J in Re Trident Microsystems (Far East) Ltd, decided in the context of light-touch provisional liquidations, were relevant by analogy. Cresswell J stated that when the Court is asked to adjourn a winding up petition and permit the continuation of a provisional liquidation, the Court is "in effect exercising its discretion to appoint provisional liquidators afresh" and must give due consideration to all relevant factors. Justice Asif KC determined that this approach should also be applied when considering the continuation of RO appointments. In other words, on each occasion the matter comes back before the Court, the Court must be satisfied that the statutory criteria in section 91B of the Companies Act for the appointment of ROs continue to be met. If they are not, the Court is under a duty to discharge the appointment.

After establishing the applicable test, the Court approved the continuation of the ROs’ appointment for the following reasons:

1. The Company was, or was likely to become, unable to pay its debts.
2. The Company and the ROs intended to present a compromise to creditors.
3. The restructuring remained feasible and continued to be supported by significant stakeholders.
4. The alternative to restructuring, being a winding up of the Company, was highly likely to result in a significantly worse outcome for stakeholders.
5. Importantly, both the ROs and the Company itself supported the continuation of the ROs’ appointment.

The Court also bore in mind the warning in Re Aubit  that the Court must be astute to ensure that a hopelessly insolvent company is not allowed to continue trading to the detriment of creditors and stakeholders simply by seeking the appointment of ROs. However, there was no suggestion by any party that this concern applied to the Company.

Justice Asif KC's judgment is significant given the RO regime in the Cayman Islands remains relatively new. The decision serves as an important pronouncement of the obligations that ROs will be required to demonstrate and clearly articulates that the Court will consider the appointment afresh at each review hearing, applying the statutory criteria as if making the appointment order for the first time.

Harneys acts for the ROs.