CAYMAN ISLANDS Law and Practice Contributed by: Shari Seymour, Kerry Ann Phillips and Michael Lockwood, Maples Group
7.3 Producing Financial Statements Bidders are not legally required to produce finan - cial statements (pro forma or otherwise) in their disclosure documents. Formal financial state - ments are not legally required to be prepared in any required form, although they are usually prepared in accordance with GAAP, IFRS or any other applicable accounting standards. A constituent company in a statutory merger must confirm to the Registrar of Companies that it is able to pay its debts as they fall due in the ordinary course of business (ie, it is solvent). This is demonstrated by preparing a statement of assets and liabilities up to the latest practica - ble date (typically no more than 30 days) prior to the merger. 7.4 Transaction Documents There is no legal requirement to disclose any transaction documents in full. However, Cayman Islands entities may be subject to onshore dis - closure and reporting obligations (if, for exam - ple, their shares are listed on a foreign stock exchange). Disclosure may also be required in a scheme of arrangement or a tender offer involv - ing a CSX-listed target; see 7.2 Type of Disclo- sure Required .
ed they are clearly disclosed and (subject to cer - tain exceptions) do not confer additional rights on those giving the commitment. However, in a scheme context, careful consideration should be given to whether insiders and/or bidder affiliates can or should vote in any event (including in light of any relevant listing rules), as that may cre - ate issues when it comes to having the scheme approved by the court.
7. Disclosure 7.1 Making a Bid Public
There is generally no legal requirement to make a bid public. For companies listed on a foreign stock exchange, the applicable listing rules may prescribe requirements for public disclosure and/or the observance of secrecy in respect of bids. In the case of a target listed on the CSX, an announcement of a firm intention to make an offer must be made in the following circum - stances: • when the board of the target has been noti - fied in writing of a firm intention to make an offer from a serious source, irrespective of the attitude of the board to the offer; or • immediately upon an acquisition of shares that gives rise to an obligation to make a mandatory offer under the Code; see 6.2 Mandatory Offer Threshold . 7.2 Type of Disclosure Required No specific disclosure is required for the issu - ance of shares in a business combination, except for a deal structured as a scheme of arrangement, in which case a circular is required (see 2.1 Acquiring a Company ), or for a tender offer involving a CSX-listed target, in which case an announcement would apply (see 7.1 Making a Bid Public ).
8. Duties of Directors 8.1 Principal Directors’ Duties
Under Cayman Islands law, directors owe the following fiduciary duties to the company as a whole: • a duty to act in good faith in what the director or officer believes to be in the best interests of the company as a whole;
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