Apr 2014
CAYMAN ISLANDS
COURT OF APPEAL
TRANSACTION AVOIDANCE – FOREIGN INSOLVENCY PROCEEDINGS
This was an appeal from a decision of Jones J on preliminary issues raised by the parties relating to the proceedings brought by the Trustee for the Madoff liquidation against Primeo Fund, founded on transaction avoidance provisions of the US Bankruptcy Law (including Sections 547, 548 and 550 of the US Bankruptcy Code and transferee claims under the New York Debtor and Creditor Law) and also claims founded on Section 145 of the Companies Law (voidable preference) or equivalent common law rules.
The three specific issues for determination on appeal were: (1) whether the Court has jurisdiction under Sections 241 and 242 of the Companies Law to apply transaction avoidance provisions of foreign insolvency law (and, in particular, provisions of US Bankruptcy Law) in aid of foreign insolvency proceedings; (2) whether the Court has jurisdiction under Sections 241 and 242 of the Companies Law to apply transaction avoidance provisions in Cayman Islands’ insolvency legislation in aid of foreign insolvency proceedings; and (3) whether the Court has jurisdiction at common law to apply transaction avoidance provisions in Cayman Islands’ insolvency law in aid of a foreign insolvency proceeding, or, in the alternative, whether the Court has such jurisdiction but only in a case where it would have jurisdiction under Section 91 of the Companies Law to make a winding up order in respect of the foreign company in question.