Cayman Islands Funds: What Does 2015 Teach Us About The Year Ahead?

Increase in winding-up petitions

In the PRC, a potentially toxic mix of a slowing economy and an ever-increasing corporate debt burden (as a proportion to GDP) is already leading to impaired loans in a number of key sectors, including steel and real property. If contagion eventuates, we may see increased insolvency and restructuring of Cayman Islands companies which have been used to raise offshore finance for PRC operating subsidiaries. In these circumstances, we take a look at some of the decisions made by the Grand Court of the Cayman Islands in 2015 and early 2016 involving winding up petitions. In 2015, the Harneys litigation and insolvency team acted on two thirds of all insolvency cases commenced in the Cayman Islands, and represented China Shanshui Investment Company Limited (CSI), Rhone Holdings LP, and Harbinger Class PE Holdings (Cayman) Ltd in the cases discussed below.