The Cayman Islands' legislature has gazetted the Companies (Amendment) Bill 2021 ("Bill") which introduces a new corporate restructuring process and creates a role for a dedicated restructuring officer in the Cayman Islands.

This initiative is a significant departure from the current position where an application for the appointment of a 'light touch' provisional liquidator, for the purpose of restructuring, must be made as part of the winding up process. Under the changes, a restructuring officer can be appointed by a company acting by its directors without a resolution of its members or an express power in its articles of association. At any time after the presentation of a petition for the appointment of a restructuring officer:

  1. no proceedings shall be commenced or continued with against the company
  2. no resolution shall be passed for the company to be wound up; and
  3. no winding up petition may be presented against the company, except with leave of the Court.

These changes are a welcome development for the Cayman restructuring regime as they will free the company from the stigma and negative publicity associated with a winding up petition and permit more expedient access to a reorganisation of its affairs. Given the popularity of the Cayman Islands for foreign investment, this initiative will provide a more flexible and effective procedure for insolvency practitioners when dealing with distressed entities.  

The Bill can be accessed here.

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