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Bondholder Litigation under the Spotlight in the Offshore Jurisdictions
Simon Jerrum, Partner, British Virgin Islands, David Bulley, Managing Partner, Hong Kong, and Andrew Jackson, Partner, Cayman Islands, ApplebySynopsis
A number of recent judgments in various jurisdictions have dealt with the question of whether and in what circumstances an ultimate account holder of notes can petition for the winding up of the issuer. In the Cayman Islands, following an earlier ruling in Bermuda, the Court has held that a petitioner had no standing to pursue a winding up petition. This approach has been followed in two decisions in Hong Kong, and also in the US. However, in the BVI, the Court has recently held that an ultimate account holder did have standing as a 'contingent creditor' to apply for the appointment of liquidators in the BVI. In this article, we consider the recent judgments in this area and the requirements that will need to be met in order for an ultimate account holder to potentially have standing to apply for the winding up of the issuer.
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