Court of Appeal Provides Clarity on the Weight to be Accorded to the Views of Shareholders on the Identity of Liquidators

The Court of Appeal of the Cayman Islands has confirmed that once it has been established that a solvent liquidation will be more “effective”, “economic” or “expeditious” if brought under the supervision of the Court pursuant to Section 131(b) of the Companies Law (2018 Revision), the views of participating shareholders as to the identity of the liquidators should be respected; and that a fund manager should take a measured and neutral approach to any such application by a shareholder to assist the Court to determine whether the grounds for the application have been made out as well as the identity of the liquidators. It is not appropriate (without justification) for a fund manager to seek to oppose a petition and/or to frustrate a participating shareholder’s attempts to appoint its preferred choice of liquidators.

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