Self-Evident Truths For Cayman Fund Directors

"We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights" US Declaration of Independence, 4 July, 1776.

One of the "self-evident truths" of the Cayman funds industry is the practice, outlawed in many other common law jurisdictions, of indemnification of directors from the assets of the company. One litigant recently attempted, and failed, to attack the indemnity afforded to a professional director on what were somewhat speculative grounds. However, the judgment serves as a useful reminder that directors' indemnities are not "inalienable rights" but must always be incorporated into the contract between the director and the company in order for directors to rely on them.