- Privy Council determines scope of Cayman liquidator's power to rectify share registers (Pearson v Primeo Fund)
- What are the practical implications of this case?
- What was the background?
- What did the court decide?
- Case details
Restructuring & Insolvency analysis: In the most recent decision in the Pearson v Primeo litigation, the Privy Council had to determine the scope of the power given to liquidators of Cayman Islands' funds to rectify a fund's share register. An issue arose in the liquidation as to whether the power under section 112(2) of the Cayman Islands Companies Law provided a liquidator with the power to amend investor's recorded shareholdings so as to achieve what he considers to be a fair result and, in doing so, override an investor's contractual and proprietary rights. The additional liquidator of the Herald Fund SPC (Herald), Mr Pearson, sought to rectify the register on this basis in order to remove the effect of the Madoff Ponzi Scheme on Herald, one of Madoff's ‘feeder’ funds. Primeo successfully argued that section 112(2) of the Cayman Islands Companies Law was not so far reaching and only enabled a liquidator to amend the share register so as to ensure that an investor's legal rights were properly recorded. Written by Peter Hayden, partner, and Christopher Levers, counsel, at Mourant Ozannes (Cayman Islands).
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