Voluntary Liquidation services in the Cayman Islands
Overview
Our voluntary liquidation services span straightforward closure of funds with no assets or liabilities to providing restructuring advice and solutions for funds with illiquid assets and contingent liabilities. The liquidation process minimizes the likelihood of future claims being made against the fund and / or its directors by ensuring all statutory and regulatory termination requirements are complied with. It ensures proper distribution to creditors and investors in accordance with legislation and the fund’s incorporation documents.
The most common reasons for a voluntary liquidation are:
- the wind down of an alternative investment fund that has reached the end of its operating life
- the elimination of entities due to a group restructuring
Funds that have reached their end of life can benefit from commencing a voluntary liquidation as there is potential for cost savings as a result of reduced or eliminated service provider fees. For example, the Cayman Islands Monetary Authority (“CIMA”) does not require audited accounts from a registered fund from the date of commencement of the winding up where third party liquidator(s) have been appointed. In addition, it may be possible for a fund to obtain an audit exemption for the stub period covering the date of the last audit to the date of the commencement of the voluntary liquidation.
Funds that have reached their end of life can benefit from commencing a voluntary liquidation as there is potential for cost savings as a result of reduced or eliminated service provider fees. For example, the Cayman Islands Monetary Authority (“CIMA”) does not require audited accounts from a registered fund from the date of commencement of the winding up where third party liquidator(s) have been appointed. In addition, it may be possible for a fund to obtain an audit exemption for the stub period covering the date of the last audit to the date of the commencement of the voluntary liquidation.
Recommendations
Our restructuring team works closely with both restructuring and tax colleagues in other offices throughout the Deloitte network to help clients undertaking restructurings achieve a structure that meets the needs of their global organizations.
