The Cayman Islands continues to be at the forefront of developments in restructuring and insolvency law in the offshore world and one of the premier jurisdictions of choice to facilitate complex and high-value cross-border restructurings.
The much-anticipated reforms to the insolvency legislation in the Cayman Islands are now expected to come into force during the course of 2022 and will provide practitioners and their clients with an alternative restructuring tool. The amendments to Part V of the Cayman Islands Companies Act (the "Companies Act") will introduce a new restructuring officer regime available to companies in financial distress, which can be accessed without the need to present a winding up petition to the Grand Court of the Cayman Islands ("Cayman Court").
Upon filing the application seeking the appointment of restructuring officers, an automatic and standalone restructuring moratorium will immediately arise which will have extraterritorial effect, similar to a Chapter 11 stay or English administration moratorium, within which a restructuring may be proposed and implemented (by way of a Cayman Islands scheme of arrangement, a restructuring process in a foreign jurisdiction or consensually, as between affected stakeholders).
This article was first published in INSOL World.
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