The Grand Court has confirmed that shareholders of companies that effect a short-form merger pursuant to Section 233(7) of Part XVI of the Companies Act (2021 Revision) are entitled to be paid the fair value of their shares on dissenting from the merger under Section 238 of the act. The eagerly awaited judgment in Changyou.com clarifies an issue which was previously the subject of extensive debate and provides welcome certainty to minority shareholders of Cayman companies.
A Cayman Islands company may be wound up either voluntarily according to its articles of association or compulsorily by the Grand Court. This article provides an overview of the compulsory process in the Cayman Islands.
It is trite law that where a petition debt is disputed in good faith and on substantial grounds, the Grant Court's ordinary practice is to dismiss or strike out the winding-up petition. However, this principle is more easily applied in theory than in practice, resulting in a remarkable amount of case law. That body of case law has been swelled in 2020 by a number of Grand Court decisions which provide further guidance as to whether a petition debt is to be considered genuinely disputed on substantial grounds.
At the recent Chambers Economic Forum, the Cayman government announced its intention to bring in a much-anticipated new regime governing corporate restructuring by the end of 2020. Until then, with the COVID-19 pandemic pushing many groups into the zone of insolvency, a number of considerations remain relevant to structures involving a Cayman entity.
The Grand Court has confirmed that shareholders of companies that effect a short-form merger pursuant to Section 233(7) of Part XVI of the Companies Act (2021 Revision) are entitled to be paid the fair value of their shares on dissenting from the merger under Section 238 of the act. The eagerly awaited judgment in Changyou.com clarifies an issue which was previously the subject of extensive debate and provides welcome certainty to minority shareholders of Cayman companies.
Ensuring the effective enforcement of judgments is a crucial aspect of a successful litigation strategy. The Cayman Islands recognises that valid decisions made elsewhere should be as enforceable as domestic judgments. While the statutory regime for registration and enforcement has been extended to only some of the superior courts of Australia and its external territories, the Cayman courts are willing to consider extending assistance to all judgment creditors through the well-trodden common law route.
Where a potential judgment debtor in onshore proceedings threatens to dissipate its assets, the plaintiff may face a pyrrhic victory with no assets against which to enforce its judgment. Where the defendant is a Cayman company or has assets in the Cayman Islands, the Cayman court has statutory jurisdiction to grant a freezing injunction in aid of those foreign proceedings, which can extend to the worldwide assets of the defendant.
The Grand Court has confirmed that shareholders of companies that effect a short-form merger pursuant to Section 233(7) of Part XVI of the Companies Act (2021 Revision) are entitled to be paid the fair value of their shares on dissenting from the merger under Section 238 of the act. The eagerly awaited judgment in Changyou.com clarifies an issue which was previously the subject of extensive debate and provides welcome certainty to minority shareholders of Cayman companies.
Ensuring the effective enforcement of judgments is a crucial aspect of a successful litigation strategy. The Cayman Islands recognises that valid decisions made elsewhere should be as enforceable as domestic judgments. While the statutory regime for registration and enforcement has been extended to only some of the superior courts of Australia and its external territories, the Cayman courts are willing to consider extending assistance to all judgment creditors through the well-trodden common law route.
A Cayman Islands company may be wound up either voluntarily according to its articles of association or compulsorily by the Grand Court. This article provides an overview of the compulsory process in the Cayman Islands.
It is trite law that where a petition debt is disputed in good faith and on substantial grounds, the Grant Court's ordinary practice is to dismiss or strike out the winding-up petition. However, this principle is more easily applied in theory than in practice, resulting in a remarkable amount of case law. That body of case law has been swelled in 2020 by a number of Grand Court decisions which provide further guidance as to whether a petition debt is to be considered genuinely disputed on substantial grounds.
Where a potential judgment debtor in onshore proceedings threatens to dissipate its assets, the plaintiff may face a pyrrhic victory with no assets against which to enforce its judgment. Where the defendant is a Cayman company or has assets in the Cayman Islands, the Cayman court has statutory jurisdiction to grant a freezing injunction in aid of those foreign proceedings, which can extend to the worldwide assets of the defendant.
At the recent Chambers Economic Forum, the Cayman government announced its intention to bring in a much-anticipated new regime governing corporate restructuring by the end of 2020. Until then, with the COVID-19 pandemic pushing many groups into the zone of insolvency, a number of considerations remain relevant to structures involving a Cayman entity.