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Heads Will Roll: Cayman’s Proposed Amendment to the Companies Act (2021 Revision) Would Abolish Headcount Test

November 2021 David Lamb

M&A lawyers can let out two cheers for the Companies (Amendment) Bill 2021 (“Bill”) which was recently gazetted in the Cayman Islands.

If enacted in its current form Bill will, amongst other things1, abolish the headcount test in members’ schemes of arrangement, typically used to privatise companies and thereupon end the decades-long struggle of the courts to apply the test to schemes of arrangement by listed companies. Members’ schemes of arrangement will then only require the approval of 75% in nominal value of the members, or class of members, present and voting either in person or by proxy at the requisite scheme meeting2.

 

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Heads Will Roll: Cayman’s Proposed Amendment to the Companies Act (2021 Revision) Would Abolish Headcount Test

 


David Lamb
Consultant

Hong Kong   +852 2842 9511
Mobile  +852 6469 3377


1 Bill also provides for a company which is, or is likely to become, unable to pay its debts to present a petition to the Grand Court for the appointment of a qualified insolvency practitioner as a restructuring officer to promote a creditors scheme of arrangement.
2 The requirements of any applicable Takeovers Code will also need to be met.

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