In an important judgment delivered on 8 December 2021, Mr. Justice Doyle emphasised the importance of the laws of the place of incorporation of the relevant company in a restructuring and/or insolvency context. A link to the judgment is here.
Background
Silver Base is the Cayman Islands-incorporated holding company for a large group specialising in liquor distribution. The Silver Base Group focuses on the sale of premium baijiu (or shaojiu), which is the world’s bestselling liquor. The vast majority of the Group’s revenue is generated in the People’s Republic of China (the “PRC”). The profitability of the Silver Base Group, which has operated since 1997, has been severely impacted by the global pandemic.
A number of creditors based in Hong Kong and the PRC had made demands against Silver Base. At the time of filing in the Cayman Islands, there were existing winding-up proceedings in Hong Kong. Accordingly, the Grand Court raised concerns regarding issues of comity and the scope of recognition of the nominated Cayman Islands officeholders.
Those concerns were dealt with, in part, by modifying the order of appointment of the provisional liquidators to leave scope for the Hong Kong court to determine the existing proceedings, despite the Cayman Islands appointment order and related moratorium. The Grand Court conveyed a message to the Hong Kong Court that, at least from the Cayman Islands perspective, it would be “sensible and appropriate” for the Hong Kong Court to recognise and give assistance to the Cayman Islands provisional liquidators to promote a restructuring of Silver Base’s debt.
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Cayman Islands Restructuring: No Place Like Home
