Walkers Fundamentals 2022

Please join us on 31 October in NYC for Walkers Fundamentals 2022 where we will explore the latest trends in Investment Funds.

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Guernsey Climbs Legal 500 Rankings

Walkers' Guernsey office is now ranked by Legal 500 as Tier 1 for legal advisers in five of its core practice areas.

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10 Walkers' Lawyers Recognised in Asia Business Law Journal's Top 50 Offshore Lawyers 2022

10 lawyers across Walkers' Bermuda, Cayman, Hong Kong and Singapore offices have been recognised in the Asia Business Law Journal’s A-List of top offshore lawyers.

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Walkers is a leading international law firm. We advise on the laws of Bermuda, the British Virgin Islands, the Cayman Islands, Guernsey, Ireland and Jersey.
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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.

Latam Airlines: Chapter 11 Plan of Reorganisation Takes Flight

In this article, first published in INSOL World - Third Quarter 2022, Neil Lupton, Siobhan Sheridan and Chaowei Fan explore LATAM Airlines' Chapter 11 proceedings.

In 2020, in response to the devastating financial effects of the COVID-19 pandemic, Latin America’s leading airline group, LATAM Airlines Group S.A. and various of its affiliates (including LATAM Finance Limited, Peuco Finance Limited and Piquero Leasing Limited, incorporated in the Cayman Islands (the “LATAM CayCos”)) filed Chapter 11 cases in the United States (the “LATAM Debtors”), and in respect of the LATAM CayCos, ‘light touch’ provisional liquidation proceedings in the Cayman Islands. More than two years later, as LATAM is poised to emerge from bankruptcy, this article looks back at some of the unique challenges and opportunities that have arisen as a result of these proceedings, and the valuable lessons the case offers to debtors and creditors seeking successfully to restructure cross-border operations while complying with competing corporate and regulatory regimes.

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This article was written in conjunction with Lisa Schweitzer and Alexandra Lotty of Cleary Gottlieb Steen & Hamilton LLP, USA.

Chambers Global Aviation Finance & Leasing Guide 2022: Guernsey

In the 2022 Chambers and Partners Global Aviation Finance & Leasing Guide for Guernsey, our aviation experts provide a comprehensive overview of the latest legal information regarding aircraft and engine purchase and sale, aircraft and engine leasing and aircraft debt finance.

This year's chapter was authored by Guernsey partners Kim Paiva, Sarah Brehaut and Chris Hutley-Hurst.

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Killian McSharry Awarded Spot on Airline Economics' Top 40 under 40 List

Walkers' partner Killian McSharry has been recognised in Airline Economics magazine's Top 40 under 40 list for 2022. The list recognises the most outstanding young professionals in the global aviation industry. Killian was selected following strong client feedback and for his work on multiple groundbreaking deals including the US$4 billion Gilead leasing platform and subsequent deliveries to the platform, and the US$600 million Juniper Aviation Investments leasing platform.

Ireland Managing Partner Jonathan Sheehan is also recognised as a mentor in the feature for his market-leading work on the complex tax aspects of aviation finance and other deals, and for his support of emerging talent in the firm.

Commenting on the accolade, Asset Finance partner Killian McSharry, said: "I have been fortunate to work on a diverse range of transactions throughout my career at Walkers collaborating with high calibre clients and colleagues from across our award-winning global practice. I'm delighted to be recognised in this year's list and thank my peers for their feedback."

Jonathan Sheehan, Managing Partner of Walkers' Ireland office, added: "Killian is a market-leading aviation finance lawyer working at the forefront of the industry. Asset and aviation finance is a key industry group for the firm and it is great to see the practice and its lawyers recognised once again. I'm thrilled to see Killian's hard work acknowledged in this year's list and it is a privilege to be named his mentor."

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*Airline Economics Issue 68 June - July 2022

Chambers Global Aviation Finance & Leasing Guide 2022: Cayman Islands

In the 2022 Chambers and Partners Global Aviation Finance & Leasing Guide for the Cayman Islands, our aviation experts provide a comprehensive overview of the latest legal information regarding aircraft and engine purchase and sale, aircraft and engine leasing and aircraft debt finance.

This year's chapter was authored by Finance and Corporate partners James Burch and Sarah Humpleby and associate Alexandra Franklin, together with Insolvency and Dispute Resolution partner Peter Kendall.

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