Compulsory winding up falls by 24%


Compulsory winding up petition filings in the Cayman Islands have fallen by 24 percent in the first three quarters of 2014 as compared to the same period last year.

This is according to Appleby’s latest report, Snapshot: Interim Report – 2014 Petition Filings, which said that the data collected points to an about-face turn from the spike experienced across many offshore jurisdictions in 2013 insolvency proceedings.

The report examines Bermuda, the British Virgin Islands, Cayman Islands, Guernsey, the Isle of Man and Mauritius, where, on average, compulsory winding up petition filings fell by 31 percent.  

This year in the Cayman Islands, the total of all classes of petition filings is among the lowest of the last seven years. There are four classes: compulsory winding up petitions, petitions for conversion of voluntary liquidation to court supervised liquidations, schemes of arrangement and capital reductions.

Appleby said the spike in insolvency petitions in Cayman in 2013 appeared to point toward a new wave of shareholder activism in 2014, fuelled by investor dissatisfaction with returns and imminent expiry of limitation periods. That wave never arrived, however, in Cayman nor in any of the other offshore jurisdictions.

“What we are seeing is demonstrative of improving market conditions that have given investors opportunities to exit long-standing investments without recourse to formal insolvency processes,” said Appleby’s Cayman-based litigation and insolvency partner, Tony Heaver-Wren.

“This trend has developed notwithstanding the fact that many of the claims that might be investigated and asserted by liquidators against service providers are approaching limitation periods and will soon become statute barred.”

Cayman, Appleby, Tony Heaver-Wren

Cayman Funds