Walkers Expands Market Leading Professional Services to the BVI

Walkers is pleased to announced that Walkers Professional Services (WPS) is expanding its operations to the British Virgin Islands.

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Walkers London Celebrates 20th Anniversary

Walkers is pleased to announce that its London office is celebrating its 20th anniversary.

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Walkers Tops Market Leading Rankings in Chambers Global Again

Walkers leads the way with 10 "Band 1" practice area rankings (out of a market leading 23 practice areas) and an overall "Band 1" ranking in 'Global Offshore'.

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AML Training Portal Launch

Walkers Professional Services Launches New e-Learning AML Training Portal

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Walkers Celebrates 5 Years in Bermuda

Walkers (Bermuda) Limited is pleased to celebrate the five year anniversary of its Bermudian operations in Hamilton, Bermuda.

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Cayman Update: Separate Liquidation Committees for Segregated Portfolios of SPCs

On 19 April 2021, Chief Justice Smellie QC held in In the Matter of Premier Assurance Group SPC Ltd. (in Official Liquidation) that the Court has the power under Order 9, rule 1(1) of the Companies Winding Up Rules, 2018 ("CWR") to order the establishment of separate liquidation committees in respect of a segregated portfolio company ("SPC") and each of its segregated portfolios.

There are no specific statutory provisions in the Companies Act (2021 Revision) (the "Companies Act") or the CWR empowering the Court to establish separate liquidation committees in respect of an SPC and its portfolios. Notwithstanding this, the joint official liquidators ("JOLs") of Premier Assurance Group SPC Ltd (in Official Liquidation) (the "Company") submitted that the Court had the power to make such a direction pursuant by way of the proviso in O.9, r.1(1) of the CWR, which provides that:

"Unless the Court otherwise directs, a liquidation committee shall be established in respect of every company which is being wound up by the Court" (emphasis added)

The JOLs submitted that pursuant to certain case law, the Court had the power to order that separate liquidation committees be formed as long as they were compliant with the requirements of the CWR. Furthermore, the establishment of separate liquidation committees would be entirely consistent with the statutory scheme prescribed by the Companies Act relating to SPCs and, in particular, Section 223(1)(a) of the Companies Act. By that provision, the legislature mandates that liquidators deal with the assets of a SPC in accordance with Section 219(6) by establishing and maintaining procedures to ensure that the assets of each segregated portfolio are segregated and separately identifiable from the assets of other portfolios and from the SPC's general assets. Following from this, it seemed appropriate from an economic and practical perspective that only those creditors with recourse to certain assets of the Company (i.e. by reference to a segregated portfolio) should have an ability to provide feedback in respect of those assets.

In the circumstances, the Court accepted that a direction for the establishment of separate liquidation committee could be made in respect of SPCs pursuant to O.9, r.1(1) of the CWR and that it was appropriate in this case for liquidation committees to be established in respect of the Company and each of its segregated portfolios.

Rupert Bell (Partner), Chris Keefe (Senior Counsel) and Daisy Boulter (Associate) of Walkers act for the JOLs.

Ireland Update: Central Bank of Ireland updates AML/CFT Guidelines for Financial Sector

On 23 June 2021, the Central Bank of Ireland published revised Anti-Money Laundering and Countering the Financing of Terrorism Guidelines for the Financial Sector. The publication of the Updated Guidelines follows the enactment of the Criminal Justice (Money Laundering and Terrorist Financing)(Amendment) Act 2021 as part of the transposition of the 5th Anti-Money Laundering Directive and expands the scope of the Updated Guidelines to also apply to virtual asset service providers. Please click here to view our advisory, which provides a summary of the new information and guidance included by the CBI in the Updated Guidelines.

 

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Reinsurance Activity In The Cayman Islands Doubling Every 18 Months?

The Cayman Islands is already well-established as an insurance jurisdiction, with 770 insurance licensees conducting business under the supervision of the Cayman Islands Monetary Authority (“CIMA”) as at 30 June 2021. What has been noteworthy of late is the increase in reinsurance undertakings domiciling in the Cayman Islands or enquiries about the establishment or re-domiciliation of various types of reinsurance structures in the Cayman Islands. Since Q2 2019, CIMA has approved 3 new licences, doubling the number of fully licensed Class D reinsurers with a physical presence on the Island (there had been 3 such entities until 2019). All the new class Ds reinsure longterm risk in the life/annuity space and all are subsidiaries of global institutional groups that have established in or re-domiciled into the Cayman Islands.

 

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Cayman Grand Court Confirms Statutory Mechanism for Approval of Former Liquidators' Fees as Statutory Trustees

Grand Court confirms that Section 48 of the Trusts Act (2021 Revision) provides a statutory gateway for the approval of former liquidators' fees as statutory trustee pursuant to Order 23, rule 5 of the CWR

A recent judgment of the Grand Court of the Cayman Islands (the "Grand Court") has confirmed that section 48 of the Trusts Act (2021 Revision) (the "Trusts Act") provides former liquidators, in their capacity as statutory trustees of the undistributed assets of a dissolved company, with a statutory gateway to seek directions from the Grand Court for the approval of their fees and expenses of administering the trust assets.

In his written ruling in the matters of Re F & C Warrior Fund Limited (Dissolved) and F & C Warrior II Fund Limited (Dissolved) (Cause Numbers FSD 105 of 2021 (ASCJ) and FSD 107 of 2021 (ASCJ)), the Honourable Chief Justice Smellie Q.C. provided welcome guidance on the appropriate procedure to be followed by a former liquidator when seeking the approval of fees and expenses incurred in their capacity as a statutory trustee pursuant to section 153 of the Companies Act (2021 Revision) (the "Companies Act") and Order 23 of the Companies Winding Up Rules, 2018 (as amended) (the "CWR").

  1. The Former JVLs' applications
Prior to the applications, F&C Warrior Fund Limited and F&C Warrior II Fund Limited (the "Companies") had been placed into voluntary liquidation, following which, the Companies' former joint voluntary liquidators (the "Former JVLs") sought to distribute redemption proceeds to the Companies' former investors. At the time of the Companies' dissolutions, a proportion of the Companies' remaining cash assets (the "Outstanding Redemptions") had yet to be distributed to the Companies' former investors, the practical effect of which was that the Outstanding Redemptions were held by the Former JVLs as statutory trustees on behalf of the Companies' former investors pursuant to section 153 of the Companies Act and in accordance with Order 23 of the CWR.

Following the expiry of the 12 month statutory trust period prescribed by Order 23 of the CWR, the Former JVLs issued ex parte originating applications under section 48 of the Trusts Act seeking directions that their fees incurred as statutory trustees of the Outstanding Redemptions be paid out of the Companies' residual cash assets, with the net remaining amounts to vest bona vacantia in the Financial Secretary of the Cayman Islands in accordance with section 153 of the Companies Act and Order 23, rule 6 of the CWR.

  1. Ruling of the Grand Court
In delivering his ruling, the Honourable Chief Justice accepted that Order 23, rule 5 of the CWR provides that a former liquidator is entitled to be paid a reasonable fee for advertising, administering claims and preparing their accounts pursuant to section 153 of the Companies Act and in accordance with Order 23 of the CWR and that the basis and amount of that fee must be fixed by the Grand Court.

In addition, the Honourable Chief Justice accepted the submission that section 48 of the Trusts Act provided the Former JVLs, in their capacity as statutory trustees of the Outstanding Redemptions, with a statutory gateway to seek an order for directions that their fees be capped in accordance with Order 23, rule 5 of the CWR.

Having regard to the above principles, the Honourable Chief Justice was satisfied that the Former JVLs' fees and expenses of administering the Outstanding Redemptions as statutory trustees had been reasonably and proportionately incurred and that the Former JVLs' times costs referable to the management and distribution of the Outstanding Redemptions were therefore recoverable as against the trust assets.

  1. Benefit of the ruling to former liquidators
From a practical perspective, the principal advantage of issuing an application under section 48 of the Trusts Act is that a filing fee of CI$200 will be payable by a former liquidator, as opposed to the CI$5,000 filing fee payable in respect of an originating application filed in the Financial Services Division of the Grand Court. Furthermore, the Honourable Chief Justice confirmed the suitability of applications of this nature to be disposed of "on the papers" on the basis that they fall squarely within the provisions of Order 85, rule 8(1) of the Grand Court Rules (1995 Revision) (as revised), thereby avoiding the cost of a formal hearing before the Grand Court.

The Chief Justice's ruling provides welcome clarification to insolvency practitioners tasked with administering undistributed assets following the dissolution of a Cayman Islands entity and confirms the availability of an efficient and economical mechanism by which a former liquidator may seek directions for the approval of their fees reasonably incurred in administering such trust assets.

Peter Kendall and Blake Egelton of Walkers acted on behalf of the Former JVLs, Simon Conway and Jess Shakespeare of PWC Corporate Finance & Recovery (Cayman) Limited.

Walkers Guide to Setting Up a Cayman Islands Cryptocurrency or Blockchain Fund

Partner Melissa Lim and senior associate Tom Hagger have assembled the 'Walkers Guide to Setting Up a Cayman Islands Cryptocurrency or Blockchain Fund' to tell you everything you need to know about setting up a Cryptocurrency or Blockchain fund in the Cayman Islands.

Why Cayman For Your Fund?

Once the investment strategy has been determined, and there is the necessary interest from investors, the decision needs to be made on the most optimal way to structure the fund. Often an offshore jurisdiction such as the Cayman Islands comes into play in the event where any of the investors are located outside of the U.S. and are U.S. tax exempt. In these scenarios it is very common for an offshore jurisdiction to form part of the fund structure.

Some of the benefits of using the Cayman Islands include:

  1. Familiarity to Managers and Investors.
  2. Robust and Flexible Legal Framework.
  3. Stable Political Climate.
  4. Availability of High Quality Service Providers.
  5. Proven Record as a World Leading Financial Centre.

Click to download full guide

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