The Companies Act of the Cayman Islands was updated and came into force on the 12th of January 2023 with the publication of the Companies Act (2023 Revision) (the “Companies Act”).
Notable update includes the replacement of references to “Her Majesty” with “His Majesty” following the passing of Her Majesty, Queen Elizabeth and the upcoming coronation of His Majesty, the King of the United Kingdom.
Part V of the Companies Act which covers the Winding Up of Companies and Associations has also been amended to include the appointment of Restructuring Officers. A new Section 91 has been added to outline requirements including, inter alia, for the appointment of a restructuring officer and, where applicable, an interim restructuring officer by way of petition to the Court. The new Section 91D sets out the specific requirements for an acceptable restructuring officer which includes the requirement to be a qualified insolvency practitioner, places joint and several liability on jointly appointed restructuring officers (unless the Court has limited their powers) and permits appointment of an additional foreign restructuring officer where the Court has appointed a qualified insolvency practitioner as a restructuring officer.
Additional subsections to the new Section 91 cover variations of, discharges to appointments of and removal and replacements of restructuring officers. The existing Section 109 has been amended to include restructuring officers in the usual remuneration provisions and the various sections of the Companies Act covering misconduct and fraud in the course of winding up and material omissions have been amended to include restructuring officers.
Section 94 has been amended to provide that companies incorporated before the commencement of this new Companies Act may present a winding up petition, or where such winding up petition has already been presented, may apply for the appointment of a provision liquidator on behalf of the company. New subsections 2A and 2B empower directors of a company incorporated after the commencement of this new Companies Act to present a winding up petition on behalf of the company on the grounds that the company is unable to pay its debts or, where a winding up petition has been presented, to apply on behalf of the company for the appointment of a provisional liquidator.
This power is subject to the articles of a company which may expressly remove or modify the directors’ authority to present a winding up petition or apply for the appointment of a provisional liquidator on the company’s behalf so a careful review of the company’s articles should be undertaken prior to making such applications.
Reach out to Stefanie Suckoo, Partner of BGA Law (Cayman) Limited, using the details below to discuss how these changes may affect your company.
Stefanie.Suckoo@bga.law | (345) 743-3301