Restructuring Options In The Cayman Islands

A question that we are regularly asked by general counsel is what options are available where a Cayman Islands holding company is facing an imminent debt crisis. In such circumstances, its board of directors must have regard to creditors' interests as a whole when discharging their fiduciary duties and should ideally be engaging with the company's creditors in order to try and agree upon a consensual restructuring solution. However, such a consensual out-of-court process would typically require unanimous support (or acquiescence) from all of the company's creditors and therefore the board may wish to consider alternative options to mitigate the risk that a disgruntled creditor may seek to disrupt any restructuring process by commencing winding up proceedings against the company.