Solomon Harris has achieved court approval of the Share Capital Reduction (‘SCR’) of a Cayman Islands (‘Cayman’) company without the need to produce a list of creditors and seek their approval for the SCR. This significantly reduced the time and costs involved. Here we discuss when and how court approval of an SCR can be obtained without creditor involvement.

In an August 2016 update to its online document AEOI Portal updates and Industry Advisories, the Cayman Islands (‘Cayman’)  Tax Information Authority (‘TIA’) has given Cayman financial institutions (‘FI’s) an extension to Friday, 2 September 2016 to complete their notification and reporting under the United States of America (‘US’) Foreign Account Tax Compliance Act (‘FATCA’) and United Kingdom (‘UK’) CDOT (Crown Dependencies and Overseas Territories) (‘CDOT and FATCA’).

A party to without prejudice negotiations may be allowed to give evidence in court of what another party said in those same negotiations, where excluding that evidence would act as a cloak for perjury, blackmail or other‘unambiguous impropriety’.  An example of this can be found in recent a decision of the England and Wales Court of Appeal (‘EWCA’), which, whilst it is not binding on the Cayman Islands (‘Cayman’) Grand Court, would be considered persuasive authority.

The Confidential Information Disclosure Law, 2016 (‘CIDL’) came into force in the Cayman Islands (‘Cayman’) on 15 July 2016, replacing the Confidential Relationships (Preservation) Law, 2015 (‘CRPL’).

What has changed?

The introduction of the new law means that a breach of duty of confidentiality is no longer a criminal offence in Cayman. However, a person whose confidentiality is breached can sue the person who divulged the confidential information.

… ESMA is of the view that there are no significant obstacles regarding competition and market disruption impeding the application of the AIFMD passport to the Cayman Islands.

On 19 July 2016 the European Securities and Markets Authority (‘ESMA’) produced its latest advice to the European Commission (‘EC’) on the extension of the Alternative Investment Fund Managers Directive (‘AIFMD’) passport arrangements to non-European Union (‘EU’) countries.  Whilst ‘… ESMA is of the view that there are no significant obstacles regarding competition and market disruption impeding the application of the AIFMD passport to the Cayman Islands’, as the Cayman Islands (‘Cayman’) is in the process of implementing new regulatory regimes ESMA has taken the view that, whilst the draft legislation and proposals are positive, it cannot give definitive advice on the application of the AIFMD passport to Cayman until those final rules are in place. Cayman investment funds may continue to be marketed in the EU under national private placement regimes (‘NPPR’s) until at least 2018.

Someone not leaving a Will, or leaving an ill-considered or improperly prepared Will which results in a legal challenge, can have devastating consequences on the finances and family relationships of those left behind. We recently looked at some everyday events which should prompt the review of a Will, and here we look at some recent judgments which highlight what challenges may arise and, in some cases, just how long it can take to resolve a challenge to a Will.

The provisions of The Limited Liability Companies Law, 2016 (the ‘Law’) came into force on the 8 July 2016. The Law was passed on 28 April 2016, and its provisions were brought into force by the Limited Liability Companies Law, 2016 (Commencement) Order, 2016. Limited Liability Companies (‘LLCs’) are now available to those wanting to establish a new corporate entity in the Cayman Islands (‘Cayman’), and the Law also includes a mechanism for converting existing companies into LLCs. Cayman LLCs will be particularly useful for those setting up master/feeder structures that include a Delaware LLC as it will enable investment managers to use the same type of corporate entity and documentation throughout the structure.

Without question, the world is in for a period of great uncertainty over the course of the next year and perhaps beyond…In this sea of uncertainty Cayman is an increasingly attractive place to live, work, invest and do business.” Cayman Premier Alden McLaughlin 24 June 2016.

In his address to the Cayman Islands (‘Cayman’) Legislative Assembly on the result of the United Kingdom’s (‘UK’) referendum on whether to ‘Remain’ in or ‘Leave’ the European Union (‘EU’), Cayman Islands Premier Alden McLaughlin reminded members that “the sound financial position of the Cayman Islands Government and the growing strength of our economy make us an excellent option for businesses and investors looking for a safe haven amid the current political and economic turmoil.” (Premier's statement) The consequences of the referendum for the UK, the EU and the rest of the world are being debated elsewhere, but here we look at whether and how the result may affect Cayman.

As of 10 June 2016, the Cayman Islands (‘Cayman’) General Registry (‘GR’) has introduced a new paperless voluntary liquidation service for Cayman registered corporate entities. The system is already available to Cayman Island Online Registry Information Service (‘CORIS’) subscribers via the Cayman GR Electronic Document Management System (‘EDMS’). The system ran concurrently with the existing manual system until 30 June 2016, but as of 1 July 2016 all company liquidation filings must be done via EDMS.

As part of its continuing drive to ensure Cayman Islands (‘Cayman’) corporate governance meets or exceeds the latest international standards, on 8 June 2016 the Cayman Islands Monetary Authority (‘CIMA’) introduced The Rule - Corporate Governance For Insurers (‘R-CGI’ or ‘Rule’). This imposes specific obligations on insurers regulated by the Authority under the Insurance Law, 2010 and is the first time insurers have been subject to a Rule on corporate governance rather than a Statement of Guidance (‘SOG’).

Globe Motors, Inc and others v TRW Lucas Varity Electric Steering Ltd and another [2016]

In April 2016 the England and Wales Court of Appeal (‘EWCA’) considered whether parties had agreed to vary their contract between them by their conduct over time, despite their contract’s express provision that it could only be amended by a written document, signed by both parties, which specifically referred to the amendment provision.  The conclusions reached by the EWCA judges would not be binding authority on the Cayman Islands Grand Court, but would be considered persuasive argument.

The Cayman Islands (‘Cayman’) Department for International Cooperation (‘DITC’) has issued final deadlines for Cayman financial institutions (‘FI’s) to complete their notification and reporting under automatic exchange of tax information (‘AEOI’) agreements with the United Kingdom (‘UK’) and the United States of America (‘US’). It has also updated its User Guide for the AEOI Portal. Finally, a new law allows the Cayman Government to establish a penalty regime for breach of Tax Information Authority Regulations (‘TIA Regs’).

Basdeo v The Hon. Min of Finance as Ex Officio Commissioner for the Collection of Stamp Duty

In March 2016 the Cayman Islands (‘Cayman’) Grand Court ruled on the correct basis to value property for the purpose of calculating Stamp Duty. Although the sum involved was small in this instance, the Court commented that it was clear that the matter was ‘....an issue of principle that may well affect many other conveyances’.

The Confidential Information Disclosure Bill, 2016

On 12 May 2016, the Cayman Islands (‘Cayman’) Government published The Confidential Information Disclosure Bill, 2016 (‘the Bill’). The main purpose of the Bill is to repeal and replace The Confidential Relationships (Preservation) Law, 2015 (‘the old Law’).  The repeal of the old Law (which they described as having ‘often … been misrepresented as Cayman’s ‘secrecy law’’) ’was confirmed on 11 May 2016 by the Cayman Premier Alden Mclaughlin and Minister for Financial Services Wayne Panton in joint announcements relating to new Cayman co-operation on an initiative to establish a global standard for the exchange of beneficial ownership information (11 May 2016 Announcement).

Cayman Enterprise City Launches Branding for Individual Zone Parks

The Cayman Islands (‘Cayman’) Special Economic Zone ('SEZ'), Cayman Enterprise City ('CEC'), was developed to fast track international companies working in high-tech sectors to establish a genuine physical presence in Cayman. In the four years since it was established the CEC has been populated by over 170 companies from around the world and is about to start work on a new campus. Independent, sector-specific Zone Parks have been designed to foster an individual identity focused on encouraging innovation and creativity for each of its core industry groups: Internet & Technology; Media, Marketing or Film; Biotechnology & Life Sciences; Commodities & Derivatives; and Maritime Services. The Cayman Media Park hosted their 2nd annual IMPACT conference in April 2016 to an audience that included tech giants Google, Microsoft and Evite. Here we look at the advantages to tech companies of establishing themselves in the Cayman SEZ. 

The Cayman Islands (‘Cayman’) government ('CIG') has passed The Limited Liability Companies Law, 2016 (the ‘Law’) on 28 April 2016, making Limited Liability Companies (‘LLCs’) available as an alternative form of corporate entity in Cayman.

In identical announcements on 11 May 2016, Cayman Islands (‘Cayman’) Premier Alden McLaughlin (‘the Premier’) and Minister for Financial Services Wayne Panton (‘the Minister’) confirmed that Cayman will join an initiative (‘the Initiative’) for the development of a global standard for the sharing of beneficial ownership information (‘BOI’). Cayman has also announced it will invite other participants in the Initiative to enter into agreements similar to the Exchange of Notes (‘EoN’) which Cayman agreed with the UK earlier this year.

Leisure and tourism is booming in Cayman.

We’ve seen a lot of exciting deal activity here in this sector in the last twelve months – we acted for a major international investor acquiring both the Westin and Sunshine Suites resorts; London & Regional purchased the Marriott Hotel; and Dart Realty completed its acquisition of the Beach Suites and former Hyatt resorts.

Dart is also on schedule to complete construction of the Kimpton Seafire Resort and Spa this year, recently featured by Forbes Magazine as one of the twenty most anticipated hotel openings of 2016.

And with the current owners of The Ritz-Carlton Grand Cayman now looking for a buyer, this is a great time to take a look at five key issues to consider when investing in hotels and resorts in the Cayman Islands.

Making a Will and keeping it up to date is something we all know we should do, and something that often gets postponed. Here we take a short look at why it’s important to keep your Will under review, the events which mean you should consider whether to change your Will and give some examples of the type of problems beneficiaries can face.

Why should I make a Will?

One of the best reasons for leaving a Will is that it gives you a say in important decisions taken after your death: -

Sophia Harris, Ian Jamieson, Adam Johnson and other team members acted for a major investor in the hospitality industry as the purchaser of the Sunshine Suites and Westin Hotel resorts, a popular boutique hotel and major resort respectively, both located on Grand Cayman's Seven Mile Beach.  Solomon Harris advised the purchaser on all Cayman law aspects of the acquisition of the hotels including: the corporate structure for the purchases; the transfers of real estate, business and other assets; the financing of the deals and the structuring of the lender’s security package; business and regulatory licensing; employment and immigration; general commercial contracts; and negotiation with the various Government departments for the extension of the underlying leases.  

“This was a great opportunity for us to showcase our multi-disciplinary expertise on another high value, complex deal involving a number of different parties and challenging objectives,” said Ian Jamieson, partner and Head of Property and Banking Finance.  “It demonstrated our Firm’s full depth and breadth of experience in its Property/Financing department with key lawyers such as  Adam Johnson playing a vital role in order to ensure that the transaction was closed as quickly as possible and all of the client’s commercial goals were met.  As part of this, we created an innovative structure to maximize deal value, and then successfully project managed its delivery. This is a major investment in the Cayman Islands – we’re very excited about the future of this project and its contribution to our economy.”

Other parties included Sidley Austin as onshore counsel for the purchaser and another top tier Cayman Islands law firm acted for the seller of the Sunshine Suites and also the provider of financing.

Disclaimer
The information contained in this article is necessarily brief and general in nature and does not constitute legal advice. Appropriate legal or other professional advice should be sought for any specific matter.

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