CAYMAN ISLANDS Law and Practice Contributed by: Sarah Humpleby, Alexandra Franklin, Peter Kendall and Sam Hall, Walkers
holders, and the Cayman Court will construe these terms broadly. There is no statutory restriction on a company carry - ing on business after it has entered into a scheme of arrangement (although the scheme may contain such Receivers may be appointed over Cayman Islands companies, either by the Cayman Court or by a secured creditor, pursuant to the terms of the relevant security document. 2.9.3 Co-Ordination, Recognition or Relief in Connection With Overseas Proceedings By virtue of Section 241 of the Companies Act, the Cayman Court has jurisdiction over the application by a trustee, liquidator, or other official appointed in respect of a debtor for the purposes of a foreign bankruptcy proceeding to make orders ancillary to a foreign bankruptcy proceeding for: • recognising the foreign representative’s right to act in the Cayman Islands on behalf, or in the name, of the foreign debtor; • enjoining the commencement or staying the con - tinuation of legal proceedings against a debtor; • staying enforcement of any judgment against a debtor; restrictions). Receivership • requiring a person in possession of information relating to the business or affairs of a debtor to be examined by and produce documents to its foreign representative; and/or • ordering that any property belonging to a debtor be turned over to the foreign representative. CWR Order 21 governs the implementation of inter - national protocols in relation to companies which are the subject of liquidation proceedings in the Cayman Islands as well as parallel foreign bankruptcy proceed - ings. CWR Order 21 also deals with cases where a Cayman Islands company in liquidation has assets located in a foreign country, and those assets are the subject of a foreign bankruptcy proceeding or receiv - ership.
Official liquidators appointed by the Cayman Court are required by CWR Order 21 to evaluate the appropri - ateness of entering into an international protocol with a foreign office-holder and to seek approval, from both the Cayman Court and the relevant foreign court, in respect of any such protocol. The Cayman Islands adopted the use of the Judi - cial Insolvency Network (JIN) Guidelines on 30 July 2018, by operation of Practice Direction No 1 of 2018. This practice direction indicates that office-holders appointed by the Cayman Court, companies subject to restructuring proceedings supervised by the Cay - man Court, and other interested parties involved in cross-border insolvency cases should consider, at the earliest opportunity, whether to incorporate some or all of the guidelines (with suitable modifications) either into: • an international protocol to be approved by the Cayman Court; or • an order of the Cayman Court adopting the guide - lines. 2.9.4 Effect of Lessee’s Insolvency on a Deregistration Power of Attorney This will depend on the laws of the lessee′s jurisdic - tion and other relevant laws, such as the laws that govern the power of attorney. If the lessee is incorporated in the Cayman Islands and the power of attorney is governed by Cayman Islands law, an irrevocable deregistration power of attorney (when granted to secure an obligation owed, typi - cally to the finance parties) will not be revoked by the winding-up or dissolution of the lessee. In practice, however, deregistration powers of attorney are not usually governed by Cayman Islands law but rather by the same governing law as the other transaction documents. 2.9.5 Other Effects of a Lessee’s Insolvency There is no process of administration (or equivalent) under Cayman Islands law. In the majority of cases, the lessee is not incorporated under the laws of the Cayman Islands, and therefore, it is unlikely the lessee would be subject to insolvency
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