In a recent decision, the Grand Court of Cayman demonstrated a flexible use of the scheme of arrangement to allow a commercial resolution of an application from the SPhinX Group, according to a note by law firm Maples and Calder.
The SPhinX Group of Companies consists of 22 Cayman Islands investment funds that were placed into liquidation in the Cayman Islands in 2006 as a result of the collapse of Refco.
The companies were solvent and the joint official liquidators expected to have a large surplus available for distribution to investors.
However, the liquidation raised complex issues caused by the intermingling of assets between the different funds and there were significant difficulties in determining the priority of stakeholder claims in respect of different companies and share classes, Maples and Calder said.
These issues were resolved by way of a scheme of arrangement pursuant to section 86 of the Companies Law (2013 Revision), which was sanctioned by the Court in November 2013. The assets of the companies were pooled and procedures were put in place for quantifying claims.
Grand Court of Cayman, Cayman, SPhinX Group, Maples and Calder