Walkers Successfully Defends Liquidators' Entitlement To Relief

A recent decision of the Grand Court will provide welcome certainty to Cayman Islands liquidators appointed over trust companies or companies that hold trust assets because it has confirmed, in the face of ardent opposition, the principle that liquidators are entitled to be paid by recourse to trust assets where there are no, or a shortfall of, estate assets.

Background

In this case, the liquidators found themselves appointed over a company whose sole function had been the provision of custodial services in relation to assets it held on trust for its numerous customers. The liquidators were required to carry out a significant amount of work in order to ensure the proper return of those assets to the customers and, in the absence of sufficient estate assets to fund their endeavours, sought remuneration equal to less than 1% of the value of those assets for doing so. The liquidators faced opposition from parties who together rejected (a) as a matter of principle,