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Recognition of foreign proceedings
Under what circumstances will the courts in your jurisdiction recognise the validity of foreign insolvency proceedings?
On application by a foreign representative (defined as a trustee, liquidator or other official appointed for the purposes of a foreign bankruptcy proceeding), the court can make orders ancillary to the foreign bankruptcy proceedings to:
- recognise the foreign representative’s right to act in the Cayman Islands on behalf, or in the name, of the debtor;
- grant a stay of proceedings or the enforcement of a judgment against the debtor;
- require certain persons with information concerning the debtor’s business or affairs to be examined by, and produce documents to, the foreign representative; or
- order the turnover of the debtor’s property to the foreign representative.
Winding up foreign companies
What is the extent of the courts’ powers to order the winding up of foreign companies doing business in your jurisdiction?
The court can wind up a foreign company if it:
- has property in the Cayman Islands;
- is carrying on business in the Cayman Islands;
- is the general partner of a limited partnership; or
- is a registered foreign company under Part IX of the Companies Law.
Centre of main interests
How is the centre of main interests determined in your jurisdiction?
What is the general approach of the courts in your jurisdiction to cooperating with foreign courts in managing cross-border insolvencies?
It is common for international bankruptcies and liquidations to involve the Cayman Islands and other jurisdictions. In such cases, the Cayman Islands courts adopt a flexible and cooperative approach to ensure the most effective winding up of the company’s affairs and protection of the interests of its creditors, wherever these are situated.
Further, Cayman Islands officeholders must consider whether it is appropriate to enter into an international protocol with any foreign officeholder. An international protocol may facilitate the orderly administration of the estate of a company in liquidation, avoid duplication of work and avoid the possibility of conflict between the official liquidator and the foreign officeholder.
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