schemes of arrangement.
It is also possible for receivers to be appointed over Cayman
Islands companies, either by the Grand Court or by a creditor of
the company with suitable security.
2.3 Obligation to Commence Formal Insolvency
Proceedings
If a Cayman company is insolvent or of doubtful solvency, its
directors have a fiduciary duty to act with regard to the interests
of its creditors. Therefore, in these circumstances they must have
regard to whether it is in creditors interests for insolvency
proceedings to be instigated.
Directors also have a duty to commence insolvency proceedings if
directed to do so by a resolution of the shareholders or a
schemes of arrangement.
It is also possible for receivers to be appointed over BVI
companies (either by the BVI court or by a creditor of the company
with suitable security).
Plan of Arrangement
A Plan of Arrangement is initiated by the director(s) of a
company or, if the company is in voluntary liquidation, by the
voluntary liquidator. There is no requirement for a company to be
insolvent before a Plan of Arrangement can be considered
The Plan of Arrangement may permit a company to:
amend its memorandum and articles of association;
reorganise, merge or consolidate, or separate its
businesses;