Legal changes made to attract insolvency work


(CNS): A number of changes are being made to the companies law that officials at the Financial Services Ministry say will restrain and attract more restructuring and insolvency activity for Cayman Islands-based companies. The Companies (Amendment) Bill 2021 is expected to be presented to Parliament at the next meeting, which has yet to be set, but the bill, which is now ready for public consideration, has been developed on the basis of proposals made by the Legislative Committee on Financial Services. . The ministry said sector stakeholders have been consulted on the proposed changes and comments have been taken into account when drafting the The law project.

The bill creates a new, stand-alone restructuring regime separate from the company’s liquidation proceedings to remove the appearance that it is part of the liquidation process. For companies considering using Cayman’s restructuring scheme, the appearance was a potential deterrent, officials said in a press release.

The bill also improves faster access to the restructuring regime. The parties concerned will be able to ask the court to appoint restructuring agents. The changes will also allow directors to go to court without a shareholder resolution, or without needing powers in their company’s articles that allow them to do so.

For all corporations incorporated prior to the start of these changes, the Bill’s membership regime will allow a corporation to include an express provision in its articles to allow directors to make liquidation motions without requiring a shareholder resolution. . For persons formed after the adoption of the bill, the directors may present liquidation requests without the need for shareholder resolutions, unless an express provision of their company’s articles of association prohibits it.

See the bill on the pages of the Government Gazette here.

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