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ARTICLE · 12 SEPTEMBER 2012

Side Letters: Cayman Court Lays Down More Guidelines For Enforceability

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The Grand Court has handed down two decisions in quick succession relating to side letters entered into by Cayman Islands corporate hedge funds.

Cayman IslandsWealth Management
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After being a hot topic in the Cayman Islands for a number of years, the Grand Court has handed down two decisions in quick succession relating to side letters entered into by Cayman Islands corporate hedge funds - both being decisions of Justice Quin.

The first was Medley Opportunity Fund Ltd. v. Fintan Master Fund Ltd & Nautical Nominees Ltd (21 June 2012), where Justice Quin decided the point that a side letter must be signed by the investor of record, and not some other party such as the beneficial owner of the shares, in order to be enforceable (please click here to see Appleby's eAlert on the Medley decision).

More recently, the Court took its analysis of the enforceability of side letters significantly further in Lansdowne Limited & Silex Trust Company Limited v. Matador Investments Limited (In Liquidation) & Ors (23 August 2012).

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