Another Chapter In The China Milk Saga

As a jurisdiction that currently has no formal restructuring regime, the appointment of a provisional liquidator has long since been utilised for the purpose of facilitating a corporate restructuring in the Cayman Islands.

A provisional liquidator may only be appointed following the presentation of a winding up petition against a company¹. Pursuant to Section 94(1) of the Companies Law one of the persons² able to petition to wind up a company is the company itself. This has historically resulted in directors of a company presenting a petition to wind up the company absent approval from the shareholders in general meeting or express authorisation in the articles.

This historic practice received judicial approval in the 2011 judgment of Jones J in re China Milk Products Group Ltd.³ in which it was held that the directors of an insolvent company could petition to wind up the company without approval of the shareholders.