The Legal 500

On 18 February 2013, the Cayman Islands Court of Appeal released its judgment in Re FIA Leveraged Fund. The judgment will be of significant interest to directors and managers of investment funds, as it provides helpful clarification as to what steps they will need to take to ensure that in specie distributions are effective and what their duties are when valuing assets to be used in these distributions.

AB Jnr & Another v MB & Others was a significant decision of the Financial Services Division of the Grand Court of the Cayman Islands, relating to a Trust Deed, dated 21 November 1985.  The weighty judgment of Hon. Anthony Smellie, CJ, at some 204 pages, follows an In Camera hearing taking place over the course of a 9 week period, between April and June 2012.

On 10 January 2013, the Mutual Funds (Amendment) Law 2012 came into effect requiring Cayman Islands master funds which have a single CIMA-regulated feeder to register with CIMA.

Following the hearing of a preliminary issue in the case of Cesar Hotelco (Cayman) Ltd and others -v- Michael Ryan and others [2012] (unreported at present) the Cayman Islands Grand Court on 19 December 2012 handed down an important and welcome judgment clarifying the relationship between the Cayman Island Registered Land Law (2004 Revision) (the "RLL") and unregistered contractual debentures. This judgment is also important in relation to the issue of acquiescence in the appointment of receivers.

(Non-Cayman Domiciliaries)  

Introduction

When a non-Cayman domiciliary dies owning Cayman Islands assets, the heirs want to access those assets as quickly and efficiently as possible. This Briefing Note deals with the practical steps involved. Reference should be made to the separate Briefing Note, entitled "Succession and Estate Administration in the Cayman Islands (non-domiciled individuals)" for an understanding of the conflict of laws issues that may arise on death. Those issues need to be resolved before the practical steps can be taken to deal with an estate.

It should be borne in mind that any assets held by a Cayman Islands incorporated company are classed, for this purpose, as Cayman Islands situated property (with some possible additional complications where a Cayman Islands company owns immovable property elsewhere in the world). It should also be borne in mind that if assets were transferred, prior to death, into a Cayman Islands Trust, it is unlikely that the following processes will be needed.

INTRODUCTION

The status of the Cayman Islands as an International Financial Centre inevitably means that it attracts significant inflows of capital from individuals who are based overseas, and who are legally domiciled elsewhere.

When those individuals die, it is important to understand the conflict of laws issues that can arise. These will need to be addressed before the heirs can access the Cayman Islands assets. This process is underpinned by a combination of Cayman Islands and international law principles and varies depending on whether the deceased died with or without a valid Will. The process also depends on whether that Will has been admitted to probate in another probate jurisdiction, and whether the Will names executors to deal with the process of the administration.

In all cases, we can assist with quickly and efficiently allowing the heirs to gain access to the assets of the deceased, dealing with all of the legal formalities on behalf of the family.

Introduction

The United States remains the most popular place in the world to register corporate jets. However, there are a number of reasons that the US is not appropriate for everyone. The Cayman Islands, since 1976, has been attracting a number of Aircraft Registrations and presents a viable alternative to the US, and other registration jurisdictions.

The Cayman Islands acts under the purview of the British Civil Aviation Authority. The process of registration generally takes 2 to 3 weeks to complete.

The Cayman Islands register (the Aircraft Register) is highly respected and recognised throughout the international aviation industry. The majority of the aircraft on the Aircraft Register are private exclusive jets (such as the Boeing Business Jet, Airbus A320, Gulfstream GIV and GVs, Falcon 900B, Falcon 2000, Hawker 900XP and Bombardier Global Express). There is also increasing interest in the Cayman Register to register commercial aircraft.

The Cayman Register can be used to register an aircraft in the "private" category, and this has been expanded to include all turbo-jet aircraft, all other aircraft above 5,700kg and helicopters that are based on yachts.

Introduction

Private trust companies (PTCs) are established with the sole purpose of acting as a corporate trustee to a trust or a number of trusts, provided those trusts are "connected".

PTCs are commonly used by high net worth (HNW) families in their wealth structuring, for a number of reasons. They protect confidentiality, they provide a comprehensive framework under which family members can be involved in decision making (by being on the board of the PTC) and they can avoid the complications of succession when used in conjunction with a STAR Trust (explained below).

The speed at which a PTC can be established, and the relatively low cost of operation have made PTCs extremely attractive to HNW families and their advisors.

The Cayman Islands legislature recently approved the Mutual Funds (Amendments) Bill 2012 which seeks to amend certain definitions within the Mutual Funds Law in order to clarify the regime relating to registration of master funds.

Introduction

If an individual owns Cayman Islands situated property, it is important to address the question of what will happen on the death of that person. In some cases, a foreign Will is sufficient to deal with the Cayman assets, in other cases, a Cayman Islands lifetime trust may be more appropriate. In some, rare, cases a Cayman Islands Will may be the solution.

This Briefing Note sets out some of the issues involved in determining what is appropriate in any given situation.  It also sets out some of the benefits of using a Cayman Islands Trust, which are not available when using a Will.