The Impact Of COVID-19 On Cayman Islands Restructurings - Insolvency/Bankruptcy/Re-structuring - Cayman Islands - Mondaq News Alerts

The long-term global impact of the COVID-19 pandemic will be far-reaching. It has already led to a significant drop in economic activity across the world, with certain industries, such as aviation, retail, hospitality, and tourism being particularly affected.

The Cayman Islands is home to one of the world's leading financial centres. Its tax neutral status, stable government, and sophisticated legal system, and the flexibility of its Companies Act make the jurisdiction attractive to investors. Most offshore companies in the Cayman islands are incorporated for holding or international training purposes, as opposed to carrying out business directly in the Cayman Islands. As such, the need for significant measures in the Cayman islands to address business concerns as a result of COVID-19 has been less pressing than elsewhere in the world.

The Cayman Islands continue to be an attractive restructuring jurisdiction. The courts and the dedicated Financial Services Division have significant experience in managing complex debt restructurings. Such debt restructurings in the Cayman Islands often involve cross-border issues and require recognition in the jurisdictions such as the United States and Hong Kong, and they often necessitate co-operation between the various jurisdictions, both at a practitioner and judicial level.

Restructuring work is certainly on the rise within the jurisdiction. Businesses continue to face great pressure given the breakdown of international supply...

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