Vol 15 (2018) - Issue 1

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Making Waves in Cayman: Ocean Rig’s Restructuring Solution

In a landmark case for the Cayman Islands, Ocean Rig, an international offshore drilling contractor1 which had faced financial pressure, sought to restructure around USD 3.69 billion of New York law governed debt. The debt was held directly by Ocean Rig UDW Inc ('UDW') which owned three subsidiaries, Drill Rigs Holdings Inc ('DRH'), Drillships Financing Holding Inc ('DFH') and Drillships Ocean Ventures Inc ('DOV', collectively 'the Scheme Companies' or 'Group'). The Group underwent the largest restructuring through the Cayman Islands Court, incorporating several new and ground-breaking developments in Cayman Islands’ legislation that demonstrated the Cayman Islands’ position as a jurisdiction of choice for complex, cross-border restructurings.
The restructuring brought clarity on:
– the Cayman Court’s willingness to appoint provisional liquidators over a foreign company;
– issues of determining a company’s 'centre of main interests' ('COMI');
– the strategic use of provisional relief in a Chapter 15 proceeding;
– the development of Cayman Islands scheme proceedings;
– the first use of a litigation trust in a Cayman Islands scheme of arrangement to preserve; and potential causes of action for the benefit of scheme creditors.