Still like the UK

Author: | Published: 1 May 2008
The landscape may not be, but the insolvency regime in Cayman is still similar to the UK

The test for insolvency in Cayman Islands law came under consideration in 2007 in connection with proposed amendments to the Companies Law (2004 Revision). The consultation draft of the Companies (Amendment) Bill 2007 proposed to insert a balance-sheet test for insolvency into the Act. The proposed provision, Section 93.2, had identical terms to Section 123.2 of the English Insolvency Act: "A company is also deemed unable to pay its debts if it is proved to the satisfaction of the court that the value of the company's assets is less than the amount of its liabilities, taking into account its contingent and prospective liabilities."

After consultation between the Law Reform Commission and various members of the accounting and legal fraternities in the Cayman Islands, the legislature omitted the proposed Section 93.2 from...