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First Cayman Restructuring Officers Appointed – Financial Restructuring



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Walkers successfully represented Oriente Group Limited (the
Company“) in the very first petition in
the Cayman Islands seeking the appointment of restructuring
officers (the “RO Petition“) pursuant to
Section 91B of the Companies Act (2022 Revision) (as amended) (such
restructuring officer regime having only recently been introduced
into the Cayman Islands on 31 August 2022).

The Grand Court of the Cayman Islands (the “Grand
Court
“) appointed Andrew Morrison, David Griffin
(both of FTI Consulting (Cayman) Ltd.) and Kenneth Fung of FTI
Consulting (Hong Kong) Limited as restructuring officers of the
Company (the “Restructuring Officers“)
for the purposes of presenting a compromise or arrangement to
creditors (or classes thereof) by way of Cayman Islands law,
foreign law and/or by way of a consensual restructuring.

Notably, the RO Petition was opposed by two creditors (the
Opposing Creditors“) who had presented
a winding up petition in respect of the Company to the Grand Court
(the “Winding Up Petition“), prior to
the presentation of the Company’s RO Petition. At the hearing
of the RO Petition on 11 November 2022, the Opposing Creditors,
amongst other things, asserted that the automatic moratorium did
not operate to stay the Winding Up Petition, on the basis that it
had been presented prior to the RO Petition. However, it was held
by the Honourable Mr Justice Kawaley that Section 91G of the
Companies Act operated to stay any and all “… court
supervised insolvency or restructuring proceedings against the
company…
” from being commenced and/or proceeded with
from the date of presentation of the RO Petition (regardless as to
when such other proceeding had commenced), except with the leave of
the Grand Court. This is helpful judicial confirmation that the
moratorium on unsecured creditor action automatically arises upon
the filing of a petition seeking the appointment of restructuring
officers.

Given the novel nature of the RO Petition, being the first
restructuring officer proceeding before the Grand Court, Kawaley J
indicated that he would provide written reasons for his decision in
due course and a more detailed update will follow.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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