Walkers Leads Offshore

This year Walkers received 10 Band 1 practice rankings in the Chambers and Partners Global Guide, more than any other offshore law firm.

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Walkers Acts on $1B Asia Deal

Walkers BVI and Cayman advised Didi Chuxing on its highly-publicised US$1 billion acquisition of 99 Taxis.

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GAIM Ops Cayman 2018

Walkers will once again be a headline sponsor of the 2018 GAIM Ops Cayman conference.

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Following the result in the United Kingdom's EU referendum, Walkers has created a Brexit page dedicated to providing our clients relevant information about the jurisdictions in which we practise.

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Walkers Asset Recovery

Fifteen Walkers lawyers were recognised in the 2017 Who's Who Legal Asset Recovery guide. This is more than any other global law firm worldwide.

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Walkers Wins HFM Week Award

Walkers has been awarded the Best Offshore Law Firm Award for Client Service at the HFM Week US Hedge Fund Services Awards 2017.

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Walkers is a leading international law firm. We advise on the laws of Bermuda*, the British Virgin Islands, the Cayman Islands, Guernsey, Ireland and Jersey.
Powerwomen 200

Walkers in IFC Powerwomen Top 200

Six Walkers lawyers have been ranked in the 2017 edition of CityWealth's IFC Powerwomen Top 200.


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Bermuda Launches ICO and Digital Assets Legislative Framework

The Government of Bermuda has tabled the Companies and Limited Liability Company (Initial Coin Offering) Amendment Act 2018 (the “ICO Act”), introducing a statutory framework for the offering of digital assets by Bermuda companies. The ICO Act provides that offerings of digital assets (“ICOs”) will be treated as a Restricted Business Activity, subject to approval by the BMA Advisory Committee upon application and submission of an offering document. Digital asset offerings will be conducted in accordance with the requirements of published regulations as well as ongoing supervision and compliance requirements, including AML/ATF.


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Update on Cayman Islands AML/CFT

The Cayman Islands Monetary Authority (“CIMA”) has provided helpful clarification in relation to its recent statement that natural persons should be designated as anti-money laundering compliance officer (“AMLCO”), money laundering reporting officer (“MLRO”) and deputy MLRO (together, the “AML Officers”). This advisory provides a summary of the key points only and we would be happy to advise in further detail if required.


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Updates in respect of Automatic Exchange of Information (“AEOI”) Cayman Islands

The Cayman Islands Department for International Tax Cooperation ("DITC") has issued an Industry Advisory in which it provides important updates to all Cayman Islands Financial Institutions (“CFIs”) in relation to FATCA and CRS.

As well as announcing the reopening of the AEOI Portal, the DITC has published revised versions of the AEOI Portal User Guide, CRS Guidance Notes and Entity Self-Certification Form. This Advisory provides a high-level summary of the key changes.


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No Basis for Appointment of Receivers Over Interests Held in a Discretionary Trust

In a recent case before the Financial Services Division of the Grand Court Walkers successfully argued that a discretionary interest in a Cayman Islands trust was not an available asset for enforcement purposes over which a receiver could be appointed.

In the Matter of Y v R concerned an application to enforce a US arbitral award in the Cayman Islands pursuant to the Foreign Arbitral Awards Enforcement Law. The Plaintiff sought the appointment of receivers by way of equitable execution to receive all distributions made to or for the benefit of the Defendant from a Cayman Islands law governed irrevocable trust (the “Trust”), of which the Defendant was a discretionary beneficiary.

Whether Receivers can be Appointed Over Interests Held in a Discretionary Trust
The key issue determined by the Grand Court was whether an interest in a discretionary trust amounted to an asset susceptible to enforcement. In this case, the Defendant had already received substantial and regular distributions from the Trust which had represented the overwhelming majority of his income for a number of years.

It was common ground that the Court has the same jurisdiction as the English High Court with respect to the appointment of receivers, and also that where a judgment debtor owns the beneficial interest in a bare trust, the Court may appoint receivers by way of equitable execution in respect of that beneficial interest.

However, the position here was different in that because the trust was discretionary in nature, the debtor’s interest in the trust assets was yet to crystallise, albeit that it might well do so in the future.

The Plaintiff relied upon the English Court of Appeal decision of Masri v Consolidated Contractors International (UK) Ltd which held that the Courthad jurisdiction to appoint a receiver by way of equitable execution in respect of future receipts due to a judgment debtor from a defined asset, and recognised the possibility of incremental developments in the Court’s jurisdiction, as established principles were applied to new situations.

However, the Defendant’s position was simply that there was no asset over which receivers could be appointed. The only right of the Defendant was to require the trustees to consider from time to time whether or not to apply the whole or some part of the Trust assets for the benefit of the Defendant, which did not amount to an interest in the Trust in itself. There was no suggestion that the trust was a sham or under the de facto control of the Defendant himself.


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Adjusting Shareholder Rights in the Winding Up of a Cayman Islands Investment Fund

A recent judgment of the Cayman Islands Court of Appeal1 (CICA) has over-turned an earlier decision of the Grand Court of the Cayman Islands (Grand Court) which had conferred the power on an official liquidator to adjust the rights of shareholders, in the winding up of a Cayman Islands investment fund, where the rights of shareholders have been distorted by the effects of a pervasive, but external fraud. Unfortunately for shareholders whose net asset values (NAVs) have been adversely affected by such a fraud, based on the current state of the law (as referenced in the CICA’s judgment) it would appear that the toolbox is bare, despite the best intentions of the draftsman.

The CICA decision is the most recent in the ongoing liquidation proceedings of Herald Fund SPC (in Official Liquidation) (Herald), a segregated portfolio company incorporated in the Cayman Islands which was one of the largest so-called feeder funds into the Madoff Ponzi scheme.

This aspect of the proceedings involved an important point of statutory construction, namely whether an official liquidator has a statutory power under section 112(2) of the Companies Law and its subordinate legislation to rectify (or, in other words, adjust) a share register so as to override the contractual rights of investors in the winding up of a Cayman Islands investment fund. Notwithstanding that this power has been exercised previously by official liquidators on at least one occasion (of which we are aware) in very similar factual circumstances without opposition, this was the first time the question of its scope and application had confronted the Grand Court and the CICA.

Herald was incorporated in the Cayman Islands in 2004 as a segregated portfolio company and was one of the largest so-called feeder funds into the Madoff Ponzi scheme (having invested all or substantially all of its assets in the Madoff Ponzi scheme since its inception in 2004). When Madoff was arrested on 11 December 2008, Herald’s business effectively collapsed overnight and its directors focused their attention, with the assistance of lawyers in various jurisdictions, on recovering its assets through litigation. Some years later, following the presentation of a winding up petition by Herald’s largest investor, Primeo Fund (in Official Liquidation) (Primeo), Herald was placed into official liquidation in July 2013.

Herald’s principal asset is its claim in the United States bankruptcy of Bernard L. Madoff Investment Securities LLC (BLMIS), which has been admitted in the amount of approximately US$1.6 billion (less a substantive “clawback” payment) – significantly less than the circa US$2 billion recorded as being held in Herald’s managed account with BLMIS prior to the discovery of the Madoff fraud. Given the hopelessly co-mingled nature of the fictitious managed account purportedly operated by BLMIS (which was, in effect, the world’s largest Ponzi scheme), the Trustee of the BLMIS bankruptcy has, in accordance with US legal principles, determined claims in the bankruptcy by reference to the investors’ individual net cash investment in BLMIS using what has been termed the “Net Investment Method” (that is, total cash invested less total amounts withdrawn prior to the collapse of BLMIS). The real value of Herald’s claim in the bankruptcy of BLMIS is currently estimated to be in the vicinity of US$750 million - US$800 million.

Further complicating matters, in May 2007 Primeo, which was already a shareholder of Herald, subscribed for further shares in Herald, the consideration for which was the in specie transfer to Herald of the assets purportedly held in Primeo’s managed account with BLMIS. At the time, those assets had a notional value of approximately US$463 million. Pursuant to that subscription, Primeo was duly issued shares in Herald at the prevailing NAV per share based on the value of its managed account with BLMIS (approximately US$463 million). However, as a result of the application of the Net Investment Method by the BLMIS Trustee, the component of Herald’s claim in the BLMIS bankruptcy attributable to the in specie transfer from Primeo has been valued at approximately US$149 million (i.e. approximately one third of the notional or face value). It was the substantially lower $149 million figure which was used by the BLMIS Trustee in calculating Herald’s admitted claim which, in turn, formed the basis of distributions received by the Liquidators for onward distribution to investors.


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1Primeo Fund (in Official Liquidation) v Michael Pearson (in his capacity as Additional Liquidator of Herald Fund SPC (in Official Liquidation)), unreported, 27 February 2018.

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