The companies’ restructuring regime in the Cayman Islands underwent significant changes in 2022. In a welcome development for the jurisdiction, the Companies Amendment Act 2021 (which commenced on 31 August 2022), now allows a debtor to seek the appointment of a Restructuring Officer (a newly-created role), supported by a worldwide moratorium, with a view to allowing a company to restructure its debts through a refined scheme of arrangement. This replaced the traditional "Provisional Liquidation" process that has historically been used in circumstances where a company intends to pursue a restructuring.
There is now no requirement for a winding up petition to be filed in the Grand Court in advance of the restructuring plan being assessed. Instead, pursuant to Section 91B (1) of the Companies Act, a company may present a petition to the Grand Court without a resolution of its members for the appointment of a Restructuring Officer on the grounds that the company is or is likely to become unable to pay its debts and it intends to present a compromise or arrangement to its creditors.
The new restructuring legislation seems likely to provide a more streamlined and flexible framework within which insolvency professionals can operate which will be beneficial to all stakeholders involved.
Dillon Eustace Cayman are ready and able to provide practical, speedy and cost-effective advices to shareholders, directors, creditors, liquidators and liquidation committees concerning their respective rights when a company or group of companies is in financial difficulty.
