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Cayman Islands Schemes of Arrangement now available for Exempted Limited Partnerships using the Restructuring Officer Regime

Mar 25, 2024

Advisory
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KEY TAKEAWAYS:

  • Exempted limited partnerships in the Cayman Islands can now use schemes of arrangement via the restructuring officer regime

  • General partners can appoint restructuring officers to seek court-approved compromises with creditors or limited partners

  • It’s predicted exempted limited partnerships will soon use this mechanism for financial restructurings and corporate transactions

A Cayman Islands scheme of arrangement is a court approved compromise or arrangement between a company and its creditors or shareholders (or classes thereof).

A scheme of arrangement is frequently used to implement a financial restructuring by varying or cramming in the rights of the relevant creditors and/or shareholders of a company but may also be used to complete corporate transactions such as a group restructuring or reorganisation, acquisitions, mergers and take-private transactions.

Traditionally, the Cayman Islands Companies Act has only afforded companies the ability to make an application to the Court under section 86 for the sanctioning of a scheme of arrangement. However, with the introduction of the new restructuring officer regime in Part V of the Companies Act, which also applies to exempted limited partnerships, general partners of exempted limited partnerships are now able to seek the appointment of restructuring officers who can then seek the sanctioning of a compromise or arrangement between the partnership and its creditors and/or limited partners.

With the increasing use of the restructuring officer regime in the Cayman Islands, it is only a matter of time before the first exempted limited partnership utilises it to sanction a scheme of arrangement. If you require legal advice on any offshore restructuring related issues, or any other Cayman Islands or BVI legal issues, please contact any of the following individuals on the Insolvency and Dispute Resolution team. 
Dispute ResolutionInsolvency & RestructuringCayman Islands

Key Contacts

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Luke Petith
Luke Petith

Luke Petith

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+971 4 363 7926

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+971 54 492 3553

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Brett Basdeo
Brett Basdeo

Brett Basdeo

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+852 2596 3393

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Cate Barbour

Cate Barbour

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+971 4 363 7917

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+971 50 821 7338

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Tania Diab

Tania Diab

Associate

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+971 4 363 7910

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+971 56 466 9029

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Michael Testori
Michael Testori

Michael Testori

Senior Associate

Dubai

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+971 4 363 7925

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+971 56 442 7896

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