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ARTICLE · 28 FEBRUARY 2022

Cayman Islands Restructuring: What Amounts To A "Rational Basis"?

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The Court dismissed the company's cross-applications on the basis that there was no credible evidence which supported the company's assertion that a viable restructuring was imminent.

Cayman IslandsInsolvency/Bankruptcy/Re-Structuring
Jonathon Milne
Jonathon Milne
Norman Hau
Norman Hau
Alecia Johns
Alecia Johns
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In the recent decision of Evergreen International Holdings Limited, delivered on 11 January 2022, the Grand Court of the Cayman Islands made an order for the immediate winding up of a company notwithstanding the company's cross-applications for an adjournment of the winding up petition and the appointment of "light-touch" provisional liquidators for restructuring purposes. The Court dismissed the company's cross-applications on the basis that there was no credible evidence which supported the company's assertion that a viable restructuring was imminent.

Background
Evergreen International Holdings Limited (the "Company") is an exempted Cayman Islands company listed on the Hong Kong Stock Exchange ("HKSE"), whose principal places of business are the People's Republic of China (the "PRC") and Hong Kong. On 23 September 2021, a creditor served the Company with a statutory demand in respect of an outstanding debt of HK$67,233,452.05.  Upon the Company's failure to

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