In light of the COVID-19 pandemic and with many people now working remotely, companies are increasingly considering the use of digital contracts and electronic signatures. To help minimise disruption and ensure business continuity, this article summarises the legal position in the Cayman Islands and provides practical advice on implementation.
Many of the key emergency legislative measures put in place by the states of Guernsey to combat the effects of COVID-19 have been aimed at protecting the local economy, with the focus on the prevention of insolvency rather than insolvency itself. These measures include the introduction of a hardship fund, the Coronavirus Payroll Co-funding Scheme and a £3,000 grant for small businesses and the self-employed.
To help Cayman hedge funds navigate the myriad issues brought about by COVID-19, this article offers a high-level checklist for fund directors and investment managers to consider. The checklist covers operational issues, issues around liquidity and possible termination and communication and reporting considerations. Each of these topics is considered in turn in relation to a typical standalone corporate open-ended Cayman fund. That said, most of the checks can be applied using a variety of Cayman vehicles.
Among myriad other things, the COVID-19 situation demonstrates the importance of having an up-to-date, valid will. Luckily, those who are not frontline or essential workers but are spending their time in lockdown or self-isolation may now have time to catch up on this life admin task. However, due to the current restrictions, making a will is likely to take a different format than normal.
The Companies (Jersey) Law 1991 allows a company registered in a foreign jurisdiction to migrate from its home jurisdiction to Jersey provided that the laws of the foreign jurisdiction allow it to do so. In addition, a Jersey company may migrate to a foreign jurisdiction and continue as a foreign incorporated company in that jurisdiction. The procedure to migrate out of Jersey can be more lengthy than that to migrate to Jersey as notice to creditors may be required.
Without prejudice privilege attaches to written or oral communications made for the purpose of a genuine attempt to compromise a dispute between parties. The effect of this rule is that such communications are generally not admissible in evidence. As demonstrated by a recent Grand Court decision, the protection provided by without prejudice privilege is important, but can be a complicated area to navigate.
With self-isolation and social distancing now the rule rather than the recommendation, working from home has become the norm. Although these actions have proven necessary, they also present certain logistical and administrative obstacles to companies continuing their business efficiently and effectively. Key questions in this regard are whether the directors of a Guernsey company can execute documents electronically and whether they can rely on documents executed in such a manner.
The Foundation Companies Law 2017 was a welcome addition to the Cayman Islands legal landscape. The law introduced a brand new legal entity known as the 'foundation company' – a remarkably flexible vehicle that operates like an incorporated trust, allowing it to function like a civil law foundation or common law trust while retaining the separate legal personality and limited liability of a company.
The Court of Appeal has provided much needed clarification of the test for validating certain transactions by companies that are subject to a winding-up petition, pursuant to Section 99 of the Companies Law (2020 Revision). Section 99 operates to help maintain the status quo of a company at the date of a winding-up petition so that the winding-up petition can continue to achieve its purposes.
COVID-19 is putting pressure on boards to make quick decisions about upcoming annual general meetings (AGMs) and to communicate with their investors about how best to proceed in such uncertain times. This article discusses how best to manage the upcoming AGM season in light of the government's new restrictive measures and the developing COVID-19 pandemic.
Section 238 of the Companies Law (2020 Revision) provides an avenue through which shareholders of a merged or consolidated Cayman Islands company can apply to have the fair value of their shares determined by the Grand Court. Section 238 has its origins in Delaware law and was first introduced into the Cayman Islands Companies Law in 2009. After a relatively uneventful first few years in operation, Section 238 is now at the forefront of jurisprudence.
Recent research highlights the increasing likelihood of people being willing to dispute a will and go to court if they are unhappy with the division of their relative's estate, and this is definitely an increasing area of work in Jersey. This article answers some pertinent questions concerning wills.
Insider fraud is a problem that persists at all levels of society, irrespective of whether the entity has commercial or altruistic motives. This begs the question of what internal controls and procedures employers in any sector can implement to reduce the risk of insider fraud. This article outlines five steps which could significantly reduce the risk for businesses of any size or type.
In late 2018 the Stamp Duty Law (Revised) was amended in order to eliminate the growing practice of reducing stamp duty due to the government by means of linked property transactions (LPTs). Essentially, the reason for introducing the LPT provisions was to ensure that stamp duty is calculated on the total value of the raw land and the dwelling constructed on that land in the case of an LPT where a development scheme links the purchase of the raw land with the subsequent construction of a dwelling.
In a recent case, the Guernsey Court of Appeal upheld the deputy bailiff's interpretation of Section 53(3) of the Trusts (Guernsey) Law 2007 that a sole beneficiary can use that section of the law to terminate a discretionary trust even if the trust instrument contains a power to add further beneficiaries.
Jersey is long established as a primary centre for the establishment of offshore funds and has been at the forefront of international developments, which have attracted international sponsors, promoters, fund managers, advisers and investors. One of the key features of Jersey's fund industry is the flexibility and range of structures and corresponding regulatory and commercial approaches that can be used for funds.
The UK High Court recently found that cryptoassets such as bitcoin are property and are therefore capable of being the subject of a proprietary injunction or freezing order. Although this is a first-instance decision, there is no reason why the Cayman courts would approach the development of the legal concept of 'property' any less purposefully.
When considering a trust structure for the express purpose of asset protection within family succession planning, the prospect of divorce is never far from the settlor's or draftsperson's mind. Divorce is a costly undertaking and never more so than when consideration must be given to offshore trust assets and the role of a trustee. Combined with the additional possibility of a successful claim against trust property, the cost has the potential to wipe out the anticipated benefit to future generations.
The government recently approved the Private Funds Bill 2020 and an amendment to the Mutual Funds Law (2020 Revision). The legislation is the result of certain EU and other international recommendations and has been developed to align the Cayman Islands investment fund regulatory regime with those of other jurisdictions. This article summarises the key features of both pieces of legislation.
The States of Guernsey recently passed the Companies (Guernsey) Law 2008 (Insolvency) (Amendment) Ordinance 2020, making Guernsey an even more desirable forum for insolvency proceedings. The changes show that Guernsey is prepared to arm insolvency office holders with the necessary tools and powers to tackle, draw in and preserve the assets of an insolvent company for the benefit of creditors.