Enforcement Of Cayman Islands Equitable Share Mortgages

In Cayman Islands finance transactions, it is common for lenders to take security over the shares in a Cayman Islands entity through a Cayman Islands law governed equitable mortgage. These equitable mortgages are typically designed to make enforcement over the shares a smooth process with no need for any further cooperation by the mortgagor. In particular, the secured lender will usually have received undated share transfer forms signed by the mortgagor, giving the secured lender (and any receiver appointed by them) express authority to complete the forms upon an enforcement event. In Yeung Ka Man v OP Multi Strategies Investment Fund, the Cayman Islands Court (“Court”) has reinforced the efficacy of this self-help remedy.