The Cayman Islands Companies Act (as revised) provides for the appointment of a Restructuring Officer regime, which can be utilised by debtor companies who wish to pursue a restructuring. A company may present a petition to the Grand Court of the Cayman Islands (the “Court”) for the appointment of a Restructuring Officer on the grounds that i) the company is or is likely to become unable to pay its debts, and ii) it intends to present a compromise or arrangement to its creditors.
Upon the presentation of a petition for the appointment of a Restructuring Officer, there will be an automatic statutory moratorium on any suit, action or other proceedings against the company. Secured creditors (over part or whole of the company’s assets) maintain their ability to enforce their security without leave of the Court or reference to the Restructuring Officer. An appointed Restructuring Officer will act as an officer of the Court and must be an independent qualified Cayman Islands insolvency practitioner. A foreign practitioner can also be appointed to act as joint appointee with the Cayman Islands insolvency practitioner.
The Restructuring Officer has the ability to achieve a consensual restructuring or can promote a restructuring by way of a scheme of arrangement. A majority in number representing 75% in value of the creditors (or classes) and 75% in value of the members (or classes) present and voting is required to agree to any compromise or arrangement.