Decision In Re Harbinger Class PE Holdings (Cayman) Ltd – A Step Forward For Open-Ended Funds?

Introduction

The recent decision in Re Harbinger Class PE Holdings (Cayman) Ltd confirms that the traditional "impossibility" test for loss of substratum will be applied in the context of a Cayman Islands company which is not an open-ended mutual fund. The decision appears, at first glance, to depart from earlier Cayman Islands authorities which deal with the question of what loss of substratum entails in the context of an open-ended mutual fund. Uncertainty remains, however, about the test for loss of substratum of a Cayman Islands open-ended fund, and this decision could be a step toward the traditional test for loss of substratum also being applied in that context.

The Proceedings