Derivative Actions

A Brief Summary of the Remedies Available in the British Virgin Islands and the Cayman Islands

Introduction

In the prevailing and often challenging economic climate, we are seeing an increased level of scrutiny from investors looking at potential remedies against directors and others who may have misused their management control of offshore structures.

In a recent Bulletin we looked at the broader remedies available to minority shareholders in the British Virgin Islands ("BVI") and the Cayman Islands. This month, we provide a high level overview of the rights a shareholder might have to bring an action in the name of the offshore company against a director who has made decisions that, whilst benefitting the director in question or the companies associated with him, are questionable and considered to have caused loss to the company.