Click the following link to read the full article: Cayman Islands Chapter – Enforcement of Judgment 2024

This article was first published on www.chambersandpartners.com. 

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Despite a number of challenges in the market, IATA recently noted that total global passenger demand for May 2024, measured in revenue passenger kilometers (RPKs), was up 10.7 per cent compared to May 2023 and total capacity, measured in available seat kilometers (ASK), was up 8.5 per cent year-on-year.  Having faced significant headwinds over the last several years, the aviation industry has proved itself to be both resilient and innovative in its endurance. Underpinning this performance has been a combination of multiple factors including an expansion in the range of financing transactions and structures in which Cayman Islands entities are deployed.  That flexibility is attractive to participants at all levels from investors to operators.

6 answers to ‘Why Cayman?’

The Cayman Islands’ strength in financial services is borne out of its ability to provide institutionally focused services to a global network of clients and this has seen it mature into one of the largest international financial centres in the world. The global financial industry can rely on the Cayman Islands’ well developed and predictable company and partnership laws and put its trust in effective, cost-efficient and tax-neutral transaction structuring. We will focus on the key advantages here.

1. Sophisticated Legal System and Political Stability: The Cayman Islands is a self-governing British Overseas Territory with an independent legal and judicial system grounded in English common law with well-developed local legislation. This predictability and stability is attractive when combined with a widely known and accepted corporate governance framework.
2. Tax Neutrality: The Cayman Islands has no direct taxation and a structure involving a Cayman Islands entity has the advantage of minimising potential tax leakage. It is free from any form of income, capital gains or corporation tax and no Cayman Islands’ withholding tax is imposed on an entity’s cash flows. Certain Cayman Islands entities with exempted status may also apply for a government undertaking confirming that such entity will not be subject to any taxation in the Cayman Islands for a period of 20 to 50 years (depending on the type of entity). The tax transparency of Cayman Islands exempted companies and partnerships can enable efficient raising of capital.
3. Flexibility: The business in which a Cayman Islands entity can be involved is generally unrestricted provided it falls within what is permitted by law. Combined with the ability to incorporate a new entity within as little as 24 hours, the flexibility allows parties to move quickly and efficiently. The Cayman Islands remains a relatively inexpensive jurisdiction in comparison to its competitors with government fees being assessed on a scale linked to the authorised share capital of the SPV. There are no exchange control restrictions allowing money and securities in any currency to be freely transferred to and from the Cayman Islands.
4. Creditor Friendly: The Cayman Islands’ insolvency regime is recognised as creditor friendly. Contractual rights including subordination, netting and set-off are recognised by express statutory provisions. The effective use of bankruptcy remoteness structures is a key aspect of asset and structured financing in the Cayman Islands and recognised as robust by rating agencies and financiers.
5. Regulation: There is a well-established regulatory framework encompassing international standards around anti-money laundering and counter terrorism, data protection, economic substance and the Common Reporting Standard (to name a few). Regulatory and financial transparency are core values embodied by the Cayman Islands Monetary Authority which is an independent regulator charged with consistent application of regulatory requirements for financial institutions.
6. International Connectivity: It is well known that Ireland is a key global hub for the aviation industry not least due to its enviable treaty network. There is a well-established route for Cayman Islands entities to be established as Irish tax resident and that can be a powerful structuring tool in a variety of transactions.

Entity Types

One of the most commonly chosen entities for asset and structured finance deals is the exempted company incorporated with limited liability (an ‘SPV’). Exempted Companies have their registered offices in the Cayman Islands and carry on business outside of the Cayman Islands. SPVs are distinct from segregated portfolio companies (‘SPCs’) and limited liability companies (‘LLCs’) in the jurisdiction. At an investor level, an exempted limited partnership is likely to be the entity of choice and the Cayman Islands is the premier jurisdiction for investment funds with an estimated 80% of all new offshore funds domiciled in the country. Incorporation can be as quick as 24 hours.

Off-balance sheet financing

In an aviation context, an SPV is typically incorporated to act as a borrower and owner/lessor of an aircraft and its shares will be held on trust by a professional trust company such as Campbells Corporate Services Limited or its controlled subsidiary.  This effectively separates the legal and beneficial ownership of the SPV and creates the ‘orphan’ structure taking the SPV off the balance sheet of the relevant parties and isolating the underlying assets from the corporate credit(s) in the deal. The trust will generally be a charitable or purpose trust maintained for the life of the deal. The other key feature for an orphan SPV deal is that all documentation is entered into on a limited recourse and non-petition basis. This ring-fences the assets and preserves bankruptcy remoteness by limiting the chance of claims against the SPV.

Transactional Diversity

Aviation itself is a multi-billion dollar industry, from commercial passengers to freighters, private aircraft, the vast network of regulators and technical service providers, the manufacturers and the infrastructure required to support it all. It is no surprise then that there are so many ways to transact. We have already touched on some of the playuzu review kinds of transactions we see but below is a (non-exhaustive) list of where the Cayman Islands can feature in deals.

Funds and investment – as we have mentioned, the Cayman Islands is the jurisdiction of choice for the formation of investment funds. In recent years we have seen new investors with capital to deploy becoming new entrants into the aviation sector.

Alternative lending, joint ventures, new leasing platforms – once the investment is identified, those funds need to be put to use and we have seen Cayman incorporated entities being used in the establishment of alternative lending platforms, joint ventures with established industry players and the founding\of new leasing platforms. The flexibility of Cayman entities is particularly attractive to alternative lenders who can deploy capital quickly and fulfill a need where traditional lenders have retreated.

Debt financing – traditional debt financing for new and used aircraft also favours the use of bankruptcy remote SPVs. From pre-delivery payment financing, to delivery financing at the point of delivery from the manufacturers (including export credit guarantee and insurance backed products), to warehouse financing of portfolios, all lend themselves to an SPV borrower. As production lines continue to ramp up, we also expect to see carbon-neutral and de-carbonisation projects increasingly highlighted across the industry. Improvement in fuel efficiency, innovations in aircraft technology and a growing focus on what ESG means for aviation financing will be put into practice in debt documentation and elsewhere as pre-delivery payments fall due and new aircraft are delivered.

Capital markets – a Cayman incorporated but Irish tax resident issuer is a tried and tested structure in aircraft asset backed securitisations (‘ABS’). Where we also see the use of Cayman entities in capital markets and rated deals are in connection with note of bond issuances (secured or unsecured) and in non-US enhanced equipment trust certificate (‘EETC’) transactions. At the time of writing access to the ABS market is heavily restricted due to, among other things, interest rate volatility and the disconnect between lease rates and cost of funds.  With this said, there have recently been two major aircraft ABS transactions in 2024 with one of these being structured through a Cayman issuer.

Loyalty financing – these highly structured hybrid capital market/securitisation type transactions entered into by several major US airlines following the deep impact of the global pandemic is an excellent example of the innovative approach the industry takes to self-preservation. The valuation of frequent flyer programmes has long been a closely guarded secret (and protected asset) but the first of-its-kind United Mileage Plus financing changed that.  The bankruptcy remoteness protections afforded to the financiers and investors by using Cayman Islands SPVs were integral to the highly structured nature of these transactions.  We have seen continued interest in this transaction structure.

 Listing services – many of the transactions already described are likely to have a requirement for notes to be listed. The Cayman Islands Stock Exchange (‘CSX’) was the first offshore stock exchange to be granted approved organisation status by the London Stock Exchange. In addition, the UK HMRC also recognises the CSX under section 1005 of the Income Tax Act (ITA) 2007 regards the CSX as a ‘recognised stock exchange’. The CSX is a specialised exchange which prides itself on being user friendly and offering an efficient and competitively priced
listing service.  A CSX listing is commonly utilised by entities (whether Cayman incorporated or otherwise) for the purpose of the “Quoted Eurobond Exemption” on withholding tax.  Notes issued pursuant to structured finance transactions are sometimes listed with the CSX but also intra-group debt is commonly CSX listed.

 Aircraft registration – a summary of the involvement of the Cayman Islands in aviation is not complete without a word on the Cayman Islands Civil Aviation Authority (’CAACI’). The aircraft registry maintained by the CAACI is an internationally respected registry with strategic values and a desire to strengthen the reputation of the jurisdiction as a safe, effective and innovative registry of choice. It is predominantly a private aircraft register but can also handle commercial aircraft (including those of the national flag carrier, Cayman Airways). It has an Article 83b Agreement in accordance with the International Civil Aviation Organisation (‘ICAO’) with the Kingdom of Saudi Arabia and, in more recent times, a transitional register for commercial aircraft. The transitional registration programme developed significantly throughout 2020 with an increase in demand from the commercial aviation community for reliable registry services resulting from the effects of the global pandemic. It should also be noted that the Cayman Islands benefits from the Convention on International Interest in Mobile Equipment (the ‘Cape Town Convention’) following the United Kingdom’s ratification. It affords entities structuring their asset financing transactions with a Cayman Islands SPV the added protection, certainty and uniformity that the Cape Town Convention and its Protocols afford.

Management and professional services

Regardless of the type of transaction, a Cayman Islands SPV still requires directors. Cayman Islands fiduciary service providers such as Campbells Corporate Services Limited can be engaged to provide administration and management services for SPVs and other kinds of Cayman entities including the provision of directors and officers, and importantly ensuring provision is made to assist the SPV meets its regulatory obligations. Ongoing monitoring and testing can be implemented to maintain required compliance procedures and ensure that the relevant entities remain in good standing with the appropriate authorities including the Registrar of Companies CIMA and the Department for International Tax Cooperation.

Looking to the future

The present macro-economic headwinds resulting from a number of factors including the continuing conflict within Ukraine has not dampened optimism.  Further, with interest rates beginning to plateau and indications of potential rate cuts have been positive.  There is an inherent industry cycle within the asset and structured finance space but with ABS transactions back underway continued softening of the market in the short term seems possible.  The fundamentals remain strong in respect of both the industry itself, and the reasons why the Cayman Islands is an effective jurisdiction to support it.

Campbells

The Cayman Islands is a leading offshore financial centre and Campbells LLP and Campbells Corporate Services Limited are right at its heart. The Campbells team provides innovative solutions, unmatched flexibility and the strength to deliver results on all types of asset and structured finance transactions. For further information or advice, please reach out to the authors or your usual Campbells contact.

This article was first published in International Aviation Financing Leasing Review 2024-25.

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Click the following link to access the full guide: Cayman Islands – Restructuring & Insolvency – Legal 500 – 2024

This was first published in Legal 500.

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Background

A STAR trust is a statutory trust established under the Special Trusts Alternative Regime (STAR) in Part VIII of the Trusts Act (2021 Revision) (“Trusts Act”). A STAR trust can be established to hold assets:

There is no requirement for the trust’s purposes to be charitable in nature.

A beneficiary of a STAR trust has no enforceable right to the trust property nor the ability to take steps to enforce the trust. The right to receive information and institute proceedings in relation to a STAR trust is vested in an enforcer who is typically appointed pursuant to the terms of the trust deed. An enforcer has a fiduciary duty to act in the best interests of a STAR trust.

In January 2024, the enforcer of the A Trust, a purpose trust (a kind of trust that has no beneficiaries, instead existing for a specific purpose) established under the STAR regime, sought the Cayman Court’s approval to exercise his power to direct the trustee to exercise rights attaching to shares held by the trustee. The exercise of those rights was central to the purpose of the trust.

An enforcer’s standing

Section 48 of the Trusts Act confers the Cayman Court with supervisory jurisdiction over trusts in respect of applications made by a “trustee or personal representative”.

The provisions of the STAR regime expressly confirm that an enforcer of a STAR trust has the same rights as a trustee of an ordinary trust including, among other things, to make applications to the Court for an opinion, advice or direction.

Reading Section 48 with the provisions of the STAR regime, the Cayman Court readily concluded that an enforcer has standing to invoke the Court’s supervisory jurisdiction to bless a momentous decision in relation to a STAR trust.

The Court’s blessing

The questions that the Cayman Court will typically consider in deciding whether to bless a momentous decision are:

Question 3, which primarily concerns the rationality of the decision, is central to the Court’s decision (see In the matter of Standard Chartered Trust (Singapore) Limited as trustee of the Emerging Markets Diversified Fund Trust FSD 82 of 2022 (DDJ)). The onus is on the decision maker to put all relevant facts before the Court and to demonstrate that the decision is being made for a proper purpose. The benefit of obtaining the Court’s blessing is that the decision maker is deemed to have discharged its duties in respect of the subject matter of the decision, but this indemnity falls away if the decision maker fails to make full and frank disclosure to the Court.

In this case, the Cayman Court was satisfied that the enforcer had the power to direct the trustee in the manner proposed and that the suggested instruction furthered the purposes for which the trust was established. The decision met the essential rationality standard, having been arrived at following careful deliberation and the receipt of legal advice. The enforcer had also properly identified all potential conflicts of interest in discharging its duty to the Court.

Conclusion

This decision makes clear that enforcers of STAR trusts can seek the assistance of the Cayman Court when tasked with making difficult decisions in relation to the trust. It underscores the critical role that enforcers play in ensuring that a STAR trust is administered properly in furtherance of the purposes for which it was created and/or in the best interests of any beneficiaries of the trust.

This article was first published in Chambers and Partners. 

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Click the following link to read the full article: Legal 500 R&I Guide – British Virgin Islands

Legal 500’s 2024 country-specific Q&A provides an overview of Restructuring & Insolvency laws and regulations applicable in British Virgin Islands.

This was first published on Legal 500’s website. 

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The Companies Act (as Revised) of the Cayman Islands (the “Companies Act”) provides a commercial, pragmatic and creditor friendly framework to facilitate cross-border transactions, including secured lending transactions.  This framework ensures the continuation of the Cayman Islands as a leading international finance centre.

This article will outline one aspect of critical importance to cross-border secured lending arrangements, being the creation of security by a Cayman Islands exempted company (a “Cayman Company”) over its assets.

There are specific Cayman Islands statutory requirements pertaining to the registration of security created over specific types of assets, such as Cayman Islands flagged ships, aircraft or land located in the Cayman Islands.  These are outside of the consideration of this article.

Companies Act Principles of Security

The Companies Act does not expressly address the creation of security over the assets of a Cayman Company. Accordingly, principles of common law govern the creation of security over the assets of a Cayman Company and a wide variety of security instruments can be utilised for such security interests. In a cross border secured lending context, the most common are equitable share mortgages, debentures, playuzu casino no deposit bonus charges and assignments of accounts, among others.

The security instrument should be in writing and the governing law may be either Cayman Islands law or a foreign law jurisdiction. Secured lending transactions will often utilise Hong Kong, Singapore, England & Wales or New York law to govern a security instrument pursuant to which a Cayman Company will grant a security interest (and this will often follow the governing law of the loan documentation), however Cayman law will often be utilised where the lex situs of the secured asset is the Cayman Islands (for example, shares in another Cayman Islands company or a Cayman sited bank account).

The courts of the Cayman Islands will recognise and give effect to the choice of a foreign governing law of a security instrument provided the choice of that foreign governing law has been made in good faith and would be a valid and binding choice of governing law that would be observed as being valid and effective by the courts of the relevant jurisdiction.

Register of Mortgages and Charges

The Companies Act requires a Cayman Company to create and maintain a register of mortgages and charges (the “Register of Mortgages and Charges”).  The original Register of Mortgages and Charges must be maintained at the registered office of the Cayman Company. The register must be maintained even if no security interests have been created by the Cayman Company.

The Register of Mortgages and Charges must set out the following details or particulars about each security interest which has been created by the Cayman Company over any of its assets pursuant to a security instrument:

• a short description of the property secured;
• the amount of the security interest created; and
• the names of the mortgagees or persons entitled to such charge.

Failure to update the Register of Mortgages and Charges with the required particulars will not jeopardise the validity or enforceability of the security interest, however each director, manager or other officer of the company may be liable to a penalty to the extent the register is not properly maintained.

The Register of Mortgages and Charges will typically be updated by the registered office provider of the relevant Cayman Company. It is not necessary to file the relevant security instrument into the Register of Mortgages and Charges (particulars of the security interest outlining the elements set out above suffice), however the registered office provider who maintains that register may request a copy of the executed security instrument prior to making the necessary update.

The Register of Mortgages and Charges is not a public document, although the Companies Act provides that creditors and shareholders may inspect the register at all reasonable times.

Perfection of Security

The Companies Act, and Cayman law generally, does not impose any perfection requirements in circumstances where a Cayman Company creates security pursuant to a foreign law security instrument over its foreign assets.  As noted above, this memorandum does not cover certain specific asset classes, such as yacht vessels, which have specific statutory registration requirements.

Priority

The Cayman Islands does not have a public registration or public filing authority for security interests created by a Cayman Company.

The Companies Act does not provide a statutory priority regime in respect of security interests granted over the same assets of a Cayman Company. Further, updating the Register of Charges with particulars of a security interest will not grant any priority in respect of competing security interests (although it does provide notice to a third-party chargee of an existing security over any relevant property).  As a result, common law principles of priority (which include, among others, determining priority by reference to the date of the creation of a security interest) will govern such security interests.

Considerations for Chargee

The Companies Act does not impose a timeframe to update the Register of Mortgages and Charges to reflect the particulars of the security interest which have been created by a Cayman Company, however a chargee will typically request (by way of undertaking or contractual agreement) that a certified copy of the updated Register of Mortgages and Charges be provided within a specified timeframe following execution of the security instrument. This will ensure any potential third party chargee who inspects the register will be on notice of the existing security.

While it is not required by the Companies Act, it is prudent for a chargee to ensure the particulars of the security interest created by a Cayman Company expressly include the details of any negative pledge (i.e. prohibition or restriction on creating any future security interest) in respect of the relevant secured property.

Variation of Security

Where a Cayman Company has created a security interest (which has been reflected in the Register of Mortgages and Charges) and a subsequent variation to that security interest has occurred, the relevant particulars in the Register of Mortgages and Charges should be updated or amended to reflect the relevant variation.

Release of Security

To the extent a security interest created by a Cayman Company is released pursuant to a deed of release or other discharge document, the Cayman Company should update the Register of Mortgages and Charges to reflect the release or termination of the relevant security interest.

The release of a security interest granted by a Cayman Company is not dependent upon the update to the Register of Mortgages and Charges by that Cayman Company. It will be effective from the date the security interest is released under the governing law of the security instrument.

Contact

For further information please contact your usual Campbells contact or reach out to any of the key contacts listed below.

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The BVI Business Companies Act (As Revised) (the “BCA”) provides a comprehensive regime to facilitate and execute secured lending transactions, most notably with respect to the creation and registration of security interests that have been granted by a BVI business company (a “BVI Company”) over assets which may be maintained outside of the BVI. This regime has been paramount in ensuring the BVI remains a leading international finance centre.

This article will look in detail at the steps, both required and optional, to register security created by a BVI company in a secured lending transaction.

BCA Principles of Security

The BCA provides that a BVI Company may, subject to the terms of its memorandum and articles of association (the “M&A”), create a charge over its property.  This charge must be created by an instrument in writing which, if agreed by the BVI Company and the chargee, may be governed by the laws of a foreign jurisdiction (i.e. governed by the laws of a jurisdiction other than the BVI).

Register of Charges

The BCA requires a BVI Company create and maintain a register of charges (the “Register of Charges”), being an internal or private register of the BVI Company. The original Register of Charges must be maintained at the registered office of the BVI Company or the office of its registered agent. This register must set out the following details or particulars about each security interest which has been created by the BVI Company pursuant to a security instrument:

• the date of the creation of the security interest;
• a short description of the liability secured by the security interest;
• a short description of the property secured;
• the name and address of the trustee for the security or, if there is no such trustee, the name and address of the chargee;
• the name and address of the holder of the charge; and
• playuzu casino free spins bonus details of any prohibition or restriction, if any, contained in the security instrument creating the charge on the power of the BVI Company to create any future security interest ranking in priority to or equaroberlly with the security interest.

Where there is any change to the security interest which impacts the details required to be set out in the Register of Charges, as set out above, then the BCA requires the relevant BVI Company to provide details of such change to its registered agent within 14 days in order to update the particulars of security in the original Register of Charges.

While the BCA does not impose a timeframe to update the Register of Charges following the creation of a security interest by a BVI Company, a chargee will typically request (by way of undertaking) that a certified copy of the updated Register of Charges be provided within a specified timeframe following execution of the security instrument.

Perfection of Security

There are no steps required under the BCA or BVI law generally for the BVI Company to perfect a security interest created over its foreign assets pursuant to a security instrument governed by the laws of a foreign jurisdiction.  Accordingly, a security instrument which is not registered in the Register of Charges will still be enforceable, valid and admissible in evidence of the security interest, however the BVI Company may be liable on summary conviction to a fine for failing to record the particulars of the security interest in accordance with the BCA.

Public Registration of Security

In addition to the registration of a security interest in the Register of Charges, the BCA also provides that the security interest may be (but is not required to be) registered in the register of registered charges (the “Register of Registered Charges”) which is maintained by the BVI Register of Corporate Affairs (the “BVI Registrar”) in respect of each BVI Company. Separate to the internal Register of Charges of a BVI Company, the Register of Registered Charges is a publicly searchable register of the particulars of each security interest created by the BVI Company which have been filed through the VIRRGIN online filing system of the BVI Financial Services Commission. While the security instrument itself is not filed or registered, any particulars which have been so filed will be recorded in the Register of Registered Charges and made publicly available and searchable.

Once the BVI Registrar is satisfied that an application to register the relevant particulars of security have met the BCA requirements, the BVI Registrar will issue a certificate of registration of the security interest and a copy will be made available to the BVI Company creating the charge and to the chargee. The certificate of registration of a charge issued by the BVI Registrar will state, and the certificate will be conclusive proof of, the date and time on which that security interest referred to in the certificate, was registered.

Priority of Registered Security

The BCA contains a statutory priority regime which applies to security interests which have been registered on the Register of Registered Charges. A security interest created over property of a BVI Company (the “Relevant Property”) and which has been registered on the Register of Registered Charges will have priority ahead of:

• a security interest created over the Relevant Property that is subsequently registered on the Register of Registered Charges with the BVI Registrar; and
• a security interest created over the Relevant Property that is not registered on the Register of Registered Charges with the BVI Registrar.

The BCA makes clear that the order of priorities set out under the statutory priority regime is subject to:

• any express consent of the holder of a security interest that varies the priority of that security interest in relation to one or more other security interests that it would, but for the consent, have had priority over; or
• any agreement between chargees that effects the priorities in relation to the charges held by the respective charges.

Furthermore, a registered floating security interest is postponed to a subsequently registered fixed security interest unless the floating security interest contains a prohibition or restriction on the power of the BVI company to create any future security interest ranking in priority to or equally with the charge.

Priority and Considerations for Chargee

A chargee holding the benefit of a security interest granted by a BVI Company should carefully consider the statutory priority regime under the BCA. While the BCA does not:

• obligate the registration of a security interest on the Register of Registered Charges; or
• apply a statutory timeframe to register such security interest,

a chargee holding the benefit of such a security interest should seek to have that security interest registered at the earliest possible time so that a potential third party chargee will be on notice of the security and also to ensure that no later security interest that may be created by the BVI Company over the same property (in favour of a third party chargee) can be registered before its own security interest is registered.  The impact of the BCA statutory priority regime in such a scenario would be to cause the latter security interest (created in favour of a third party chargee) to take priority over the initial chargee’s security, were it not registered on the Register of Registered Charges.

Furthermore, a chargee (or potential chargee) taking security in the form of a floating charge should be careful to ensure that the security instrument it enters into with the BVI Company contains a clear negative pledge – a prohibition or restriction on the power of the BVI company to create any future security interest over the relevant property or collateral being secured in its favour. This is to ensure that the floating charge which has been registered is not, through operation of law, made subordinated in priority to a subsequent fixed charge which has been registered.

Priority of Unregistered Security Interests

Security interests which have not been registered on the Register of Registered Charges remain subject to the common law rules of priority which, in general terms, hold that priority between separate security interests will be determined by the dates upon which the relevant security interests were created. Certain exceptions to the common law rules may apply and it is always prudent to seek legal advice which takes into account specific fact patterns when these circumstances arise.

Variation of Registered Security

Where a security interest has been registered on the Register of Registered Charges by the filing and registration of the relevant particulars, and there has been a subsequent variation to that security interest, the terms of which impact the filing, then the BCA permits a variation to be filed to allow the BVI Registrar to update the registered security interest to reflect the variation.

Once the applicable variation filing has been made in the approved form, the BVI Registrar will register the variation and issue a certificate of variation which will contain the date and time on which the variation to the security interest was registered (and which will constitute conclusive proof of the date, and time, the variation was registered).

Release of Registered Security

Once a security interest in respect of the relevant property of a BVI Company has been released by a chargee (or all liabilities secured by the security interest have been paid or satisfied in full), a notice of satisfaction or release may be filed with the BVI Registrar.

The notice of satisfaction or release may be filed by the BVI Company or the chargee.  To the extent the filing is made by:

• the chargee, it may be filed by the registered agent or a BVI lawyer of the chargee; or
• the BVI Company, it may be filed by the registered agent of the BVI Company or a BVI lawyer acting on the instruction of the BVI Company, however the notice must be signed by the chargee or a registered agent or BVI lawyer acting on behalf of the chargee.

playuzu casino bonus Provided the notice of satisfaction or release complies with the provisions of the BCA reflected above, the BVI Registrar will register the notice and issue a certificate of the satisfaction, release or partial release (as applicable) of the security interest and issue a copy of the certificate to the BVI Company and the chargee. This certificate will state the date and time the security interest is deemed to no longer be registered in respect of the relevant property specified in the notice (be it the entirety of the secured property or a part thereof).

Release – Register of Charges

The release, or any partial release, of a security interest created by a BVI Company will also need to be reflected in the internal Register of Charges.

Contact

For further information please contact your usual Campbells contact or reach out to any of the key contacts listed below.

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Click the following link to read the full article: AIMA Journal – Hurricane season_Practical solutions for CI funds_sanctions and CIMA – June 2024

This article was first published in the Q2 edition of the AIMA Journal.

If you have any questions or would like to learn more about this topic, please reach out to Robert, James or your usual Campbells contact.

The post Hurricane season: Practical solutions for Cayman Islands funds appeared first on Campbells.

More specifically, he discusses:

• the most popular dispute resolution methods for clients in the jurisdiction;
• how the legal profession is keeping up with industry trends and clients’ preferences;
• recent changes affecting disputes lawyers;
• clients’ attitudes towards litigation in BVI courts;
• notable recent or upcoming reforms or initiatives affecting court proceedings;
• the most significant recent trends in arbitral proceedings; and
• key changes in relation to dispute resolution in the near future arising out of technological changes.

Access the full article here.

This article was first published on Lexology.com. Panoramic Next: Dispute Resolution is an engaging interview-style exploration of the global litigation, arbitration and alternative dispute resolution (ADR) landscape. 

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2023 has produced the first special purpose acquisition company (SPAC) related filings in the Grand Court of the Cayman Islands, and Campbells has recently advised on numerous SPAC related disputes.

The SPAC structure

A SPAC is a structure whereby a special purpose vehicle is listed on a public stock exchange to raise IPO proceeds, which are used to complete a merger with a privately held entity (often a promising start-up) within a certain period of time.

Class A Shares in a SPAC are issued to the public at a specified price, and those proceeds are held in trust. The SPAC then has a specified period of time within which to consummate a merger using those proceeds, failing which it must return them to the public investors (with interest), and then ordinarily dissolve.

In exchange for funding its set-up costs, acting as its directors and managers, and being responsible for identifying a target and negotiating a merger, the sponsors of a SPAC are issued Class B shares. These shares generally give the sponsors control of the SPAC and convert into Class A shares if a merger is consummated. Generally, these shares will convert into 20% of the value of the SPAC in the event of a merger, but will be worthless if no merger takes place.

The SPAC boom

While the SPAC concept was developed decades ago, the volatility surrounding the global COVID-19 pandemic saw a renewed enthusiasm for SPAC deals, with 247 SPACs incorporated in 2020, raising USD80 billion, and a further 295 SPACs incorporated, raising USD96 billion, in the first quarter of 2021 alone, before a sharp decline beginning in 2022. While the US was the epicentre of the SPAC boom, significant numbers of SPACs were also launched in other jurisdictions. It has been estimated that around one third of the SPACs launched globally during this boom were incorporated in the Cayman Islands.

SPAC maturities

While early SPAC launches and mergers were wildly successful, the majority of SPACs launched between 2020–2022 have ultimately failed to consummate a merger transaction within the required time period. Under the usual terms of Cayman Islands SPAC constitutional documents, those SPACs are now required to return the funds held on trust to investors (with interest), and then liquidate and dissolve.

SPAC disputes

The failure to consummate the intended business combination transactions has resulted in a number of disputes arising, which in some cases have led to the commencement of litigation in the Cayman Islands. The failure of a SPAC to complete a merger within the required timeframe may give rise to claims against:

Claims against the SPAC

Potential claims against a SPAC itself include:

These types of claims may involve liquidation proceedings, seeking a winding up of the SPAC, either because it cannot pay debts to the investors, or on the just and equitable ground in other circumstances, or claims for breach of contract by the SPAC. Other types of claims are also possible, but are in general less likely.

Claims against directors

Claims against the directors of a SPAC might be distinct from, or in addition to, claims against a SPAC itself. Claims against directors of a SPAC might be brought by creditors of a SPAC, if the SPAC has incurred debts which it cannot repay, or on a derivative basis by investors in the SPAC for any breaches of their fiduciary duties. Breach of duty claims may also be brought against directors by the SPAC itself, including by any liquidator(s) of the SPAC.

Claims against directors of a SPAC may carry personal liability, either to compensate the claimant for any loss it has suffered, or to account for any profits which have been made as a result of a breach of duty. Such claims may also involve indemnity issues, relevant insurance coverage and other issues stemming from the ability of the company to meet claims.

Claims against a sponsor

Claims against a sponsor may arise from the conduct of the management or employees of the sponsor, who are playuzu casino review generally also the management or directors of a SPAC. Such claims are most likely to be brought if those employees have taken actions which appear to prefer the interests of the sponsor to the interests of the SPAC, or its investors or creditors.

Where such claims are made, the knowledge of these employees of the sponsor may be attributed to the sponsor, such that the sponsor may be liable to compensate the claimant for loss they have suffered, or to account for any profits the sponsor has made.

Claims against other parties

It is possible that claims could also be brought against other parties involved in promoting, sponsoring or facilitating the SPAC, including underwriters and professional advisers. Generally, such claims would need to be parasitic on claims against another party (whether the SPAC, the directors, or the sponsor), and to involve allegations of conspiracy, knowing assistance of a breach of duty, or knowing receipt of property involving a breach of duty.

Such claims are more complicated than direct claims against the primary alleged wrongdoer, but can conceptually, in appropriate circumstances, be pursued in the Cayman Islands.

This article was first published on www.chambers.com.

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