Guide to Insolvency and Restructuring in the Cayman Islands

Transcription

1 Guide to Insolvency and Restructuring in the Cayman Islands

2 TABLE OF CONTENTS Preface... 1 Frequently Asked Questions...2

3 PREFACE Appleby is the longest established law firm in the Cayman Islands. Our success is built on giving timely, clear and sound advice that reflects an understanding of our clients business needs. We regularly work with and many of our lawyers come from the world s leading international firms. We aim to provide world-class quality of service and expertise, combining in-depth knowledge of Cayman Islands laws and regulations with international experience. 1

4 FREQUENTLY ASKED QUESTIONS 1. Legislation: What legislation is applicable to bankruptcies and reorganisations? Corporate insolvency in the Cayman Islands is governed by the Companies Law (2004 Revision). The term bankruptcy is generally limited in Cayman Islands law to individual insolvency, which is governed by the Bankruptcy Law (1997 Revision) and is outside the scope of this work. Part V of the Companies Law deals with the winding up of companies, both voluntarily and compulsorily. Its provisions are based on those of English Companies Acts prior to the Insolvency Act The Cayman Islands follow the UK Insolvency Rules 1986, insofar as they are relevant, and with necessary adaptations to suit local circumstances. Sections 86 to 88 of the Companies Law deal with reorganizations through schemes of arrangement. 2. Excluded Entities: What entities are excluded from bankruptcy proceedings and what legislation applies to them? Winding up under the Companies Law is restricted to companies formed and registered in the Cayman Islands. It does not extend to partnerships, which are dealt with under the Partnership Law, or to individual insolvencies, as noted above. While there is no express statutory authority to wind up the business in the Cayman Islands of a foreign company, even if the Cayman Islands are its principal place of business, there is judicial precedent for doing so where the foreign company is registered in the Cayman Islands as a "foreign company" under Part IX of the Companies Law. In the absence of this, proceedings would need to be commenced in the company's country of incorporation and the courts of that country would be able, as noted below, to request assistance from the courts of the Cayman Islands as required to administer the local assets or business. The Cayman courts deal regularly with cross border insolvencies and will generally recognise the authority of foreign appointed liquidators to act in respect of Cayman assets and will also grant appropriate relief to assist liquidations in other jurisdictions. 3. Secured Lending and Credit (Immovables): what are the principal types of security devices (e.g. mortgages, etc) that are taken on immovable (real) property? The principal type of security device taken on immovable (real) property is a charge which is registered on the land register. 4. Secured Lending and Credit (movables): what are the principal types of security devices (e.g. mortgages, etc) that are taken on movable (personal) property? Devices used for movables include legal and equitable mortgages and charges of securities, ships, aircraft and vehicles, hypothecations of cash deposits and legal assignments of things in action. 1

5 A debenture generally creates a fixed charge over certain specified assets (e.g. movable property which is not caught by a charge over real estate) which should not be disposed of without the lender s written consent. It creates a floating charge over all the undertaking and all other assets of the borrower both present and future such as stock in trade. The borrower would be permitted to dispose of such property unless and until the floating charge crystallises as a fixed charge in the event of default. All mortgages and charges made by a Cayman company in respect of its assets should be entered in the company s register of mortgages and charges maintained on the company s minute book at its registered office in the Cayman Islands. The register of mortgages or charges is open to inspection by any member or creditor of the company. 5. Unsecured Credit: What remedies are available to unsecured creditors (e.g. seizures, attachments, judgments, etc.)? Are the processes difficult or time consuming? Are pre-judgment attachments available? Do any special procedures apply to foreign creditors? Apart from the winding up process, unsecured creditors can only recover debts by obtaining and enforcing judgment. Interim orders for the preservation of assets (but not for their delivery up) are available pending judgment. The speed and ease of obtaining judgment against a debtor depends upon the extent to which the proceedings are contested. If the proceedings are contested, a creditor who is ordinarily resident outside the Cayman Islands may be ordered by the court, on an application by the debtor, to give such security for the debtor s costs of the proceedings as the court thinks just. Once a judgment has been obtained, it may be enforced by one or more of the following remedies: (i) (ii) (iii) (iv) (v) (vi) a writ of fieri facias or of sequestration by which the debtor s goods are seized and sold; garnishee proceedings, or attachment of debts; a charging order over the debtor s land or securities; the appointment of a receiver over the debtor s business or assets; an order attaching the debtor s earnings; and an order for the debtor to be committed to prison for willfully refusing to pay the debt. 6. Courts: What court(s) are involved in the bankruptcy process? Are there restrictions on the matters that the court(s) can deal with? Corporate insolvency proceedings are brought in the Grand Court of the Cayman Islands. Subject to the minimum debt (equivalent to US$120) upon which a creditor s winding up petition can be presented, there is no restriction on the jurisdiction of the Grand Court over the winding up of Cayman Islands companies. Aside from the initial hearing of the winding-up petition, the Court has extensive powers in connection with winding up proceedings. It hears appeals by creditors and 2

6 contributories against determinations of liquidators and applications by court-appointed liquidators for directions. It can order widely defined classes of person to appear for examination, can make orders regarding the payment of debts or delivery of property by contributories, and generally controls the liquidation process. Appeal lies from the Grand Court to the Court of Appeal of the Cayman Islands and from there, with leave, to the Privy Council in England. 7. Voluntary Liquidations: What are the requirements for a debtor to commence a voluntary liquidation of its business? What are the effects of the commencement of the liquidation? A voluntary liquidation commences through a resolution of the members. There is no distinction in the Cayman Islands between a creditors and a members voluntary liquidation. The effect of such a resolution is that the company ceases to carry on its business except as may be required for its beneficial winding-up, and liquidators take over the functions of the directors. Subsequent share transfers are void. The voluntary liquidators, the creditors or the members may apply to the Grand Court for the voluntary liquidation to continue subject to the supervision of the court. Such a court-supervised voluntary liquidation differs in few material respects from a compulsory (involuntary) liquidation. 8. Involuntary liquidations: What are the requirements for creditors to successfully place a debtor in involuntary liquidation? What are the effects of the commencement of the liquidation? The principal ground for a creditor s petition to wind up a company is that it is unable to pay its debts. If a winding up order is made all dispositions of the property of the company, and every transfer of shares or alteration in the status of the members of the company made between the the date of presentation of the petition and the order for winding up are void unless the court otherwise orders. In addition, there is an automatic stay of all proceedings against the company, which may not be commenced or proceeded with except with the leave of the court. On the making of a winding up order, the court will appoint one or more persons to act as official liquidators. There is currently no system of licensed insolvency practitioners, but the court will only appoint someone whom it deems to be fit and proper to act as official liquidator. 9. Voluntary Reorganizations: What are the requirements for a debtor to commence a financial reorganization? What are the effects of the commencement of the reorganization? A debtor has to fulfill no statutory requirements before commencing a financial reorganisation. However, if it is to be binding on all the company's creditors or members (as the case may be), it must be sanctioned by the court: the company must show that a majority in number and 75% by value of the company's creditors or members (as the case may be) agree to the reorganisation at a meeting convened by order of the court. 3

7 Where the purpose of the arrangement is the reconstruction of any company or companies or the amalgamation of any two or more companies, the court has wide powers to make consequential orders for facilitating the scheme, including the transfer of liabilities of the transferor company and provision for dissolution of the company without a winding up. The scheme becomes effective when a copy of the court order is delivered to the registrar. 10. Involuntary Reorganizations: What are the requirements for creditors to commence an involuntary reorganization? What are the effects of the commencement of the reorganization? There is no provision for creditors to commence an involuntary reorganization. However, where a company under pressure from its creditors wishes to make a composition or agreement which will be binding on them, it may apply to the court for sanction: (see 9). Any arrangement entered into between a company about to be wound up voluntarily and its creditors is binding on the company if sanctioned by a special resolution, and the creditors if acceded to by 75% in number and value of the creditors. 11. Mandatory Commencement of Insolvency Proceedings: Are companies required to commence insolvency proceedings in particular circumstances (to avoid personal liability to directors and officers or otherwise)? In what circumstances must companies do so? If proceedings are not commenced, what liabilities can result? There is no statutory requirement for a company to commence insolvency proceedings in any particular circumstances. However, if the directors cause a company to continue to trade whilst it is insolvent when there is no reasonable prospect of the company trading out of insolvency they risk being held liable personally for breach of their fiduciary duties to the company 12. Doing Business in Reorganizations: Under what conditions can the debtor carry on business during a reorganization? What conditions apply to the use of assets and to creditors who supply goods or services after the filing? What are the roles of the creditors and the Court in supervising the debtor s business activities? The Cayman courts have adopted an innovative and flexible approach in dealing with companies which wish to trade out of their difficulties or to continue doing business during a reorganization. There being no equivalent in Cayman Islands law to the UK s administration procedure or Chapter XI in the US, the Cayman courts have in appropriate cases been prepared to place the company into provisional liquidation ie liquidators are appointed on a provisional basis. This affords the company a breathing space in which it can continue to trade (under the watchful eye of the provisional liquidators) until such time as a plan/scheme of arrangement can be implemented. Once a scheme of arrangement is in force there are no statutory restrictions on the manner in which the company can carry on business, though the scheme itself may contain such restrictions; indeed the court may require them before approving a scheme. Where a scheme has been sanctioned by the court, creditors bound thereby may apply to the court for enforcement of its terms. 4

8 13. Sale of Assets: In (a) a reorganization or (b) a liquidation, what provisions apply to (1) the sale of specific assets out of the ordinary course of business and to (2) the sale of the entire business of the debtor? In a reorganization the sale of assets or of the entire business will be governed by the terms of the scheme of arrangement. In a liquidation by the court the official liquidators have a statutory power, with the sanction of the court, to sell the assets or the entire business of the debtor company. Voluntary liquidators may without the sanction of the court exercise any powers conferred on official liquidators. 14. Stays of Proceedings/moratoria: What prohibitions against the continuation of legal proceedings or the enforcement of claims by secured and unsecured creditors are imposed by legislation or court order in (a) liquidations and (b) reorganizations? In what circumstances can secured or unsecured creditors obtain relief from such prohibitions? When an order has been made for the winding up of a company there is a statutory prohibition on any suit, action or other proceeding being proceeded with or commenced against the company except with the leave of the court. A creditor may apply for such leave. There is no such automatic stay in the case of a voluntary liquidation. In a reorganization there is no prohibition on the continuation or commencement of proceedings unless there is a term of the scheme of arrangement to that effect. 15. Set-off and Netting: To what extent are creditors able to exercise rights of set-off or netting in a liquidation or in a reorganization? Can creditors be deprived of the right of set-off either temporarily or permanently? It is a statutory requirement in a liquidation that effect be given to rights of set-off or netting. In a reorganization creditors could only be deprived of such rights if a scheme of arrangement restricting such rights were approved by the requisite majority of creditors and were sanctioned by the Court as being fair and sufficiently exceptional to justify such a derogation. 16. Post-filing Credit: Does your country s insolvency system allow a debtor in (a) a liquidation or (b) a reorganization to obtain secured or unsecured loans or credit? What priority is given to such loans or credit? Liquidators are empowered to obtain loans or credit. Any such loan or credit would be an expense of the liquidation and would rank in priority to the claims of preferential or unsecured creditors. A reorganization would only affect a company s ability to obtain loans or credit to the extent that a scheme of arrangement sanctioned by the court contained any terms relevant to such ability. 17. Successful Reorganizations: What features are mandatory in a reorganization plan? How are creditors classified for purposes of a plan and how is the plan approved? 5

9 The mandatory features include the obtaining of court approval following acceptance of the plan or scheme by the creditors/members (see 9). The classification of creditors/shareholders for voting purposes is determined by the court. 18. Expedited reorganizations: Do procedures exist for expedited reorganizations (e.g. pre-packaged reorganizations)? There are no specific provisions permitting expedited reorganizations. However, the court does have a discretion to set a short timetable for the convening of meetings of creditors or shareholders and the subsequent court hearing for the consideration of a scheme of arrangement. Also, there is jurisdiction immediately upon the presentation of a winding up petition to appoint provisional liquidators and to restrain any proceedings by creditors against the company pending, for instance, the proposal by the company of a scheme of arrangement. 19. Unsuccessful Reorganizations: How is a proposed reorganization defeated and what is the effect of the plan not being approved? What happens if there is default by the debtor in performing an approved plan? If the creditors/members or the court do not approve a scheme it never takes effect. The court may refuse to sanction even a creditor approved scheme, for example if it believes that the creditors voting in favour have acted in a manner which was oppressive to the minority or in bad faith. Any party bound by the scheme can apply to be heard by the court in the event of default by the company. 20. Bankruptcy Processes: During a bankruptcy case, what notices are given to creditors? What meetings are held? What committees are or can be formed? What powers or responsibilities do these committees have? Can creditors initiate proceedings to pursue remedies against third parties? In a winding up by or under the supervision of the court, after a petition has been presented and served on the company, a notice of the hearing of the petition must be advertised in the Cayman Islands Gazette so that creditors may have notice of it. There is no statutory obligation on the official liquidator once appointed to produce a report on the winding up, although he is likely to do so, following the UK practice. A Grand Court Practice Direction which took effect from 1 January 2004 provides that in any liquidation by or under the supervision of the court a liquidation committee should generally be established. The liquidation committee is responsible for fixing the official liquidator s remuneration subject to any resolution of the creditors or the shareholders (as the case may be) as a whole or any order of the court. Otherwise, the function of the liquidation committee or of any meeting of creditors or 6

10 shareholders which the court may direct be held is to ascertain their wishes with regard to the winding up with such effect being given to any such wishes as the court may direct. When a winding up order has been made, the power to bring proceedings against third parties in the name of the company vests in the official liquidator with the sanction of the court. If he fails to pursue remedies against third parties, an aggrieved creditor may apply to the court for his removal. 21. Claims and Appeals: How is a creditor s claim submitted and what are the applicable time limits? How are claims disallowed and how does a creditor appeal a disallowance? Are there any provisions that deal with the purchase, sale or transfer of claims against the debtor? A creditor is required to submit his claim in writing to the liquidator in the form known as a proof of debt. The liquidator is entitled to call for further particulars or the production of documentary or other evidence in support of the claim. Every creditor must bear the cost of proving his own debt. The rules do not provide a particular time limit for creditors to file proofs of debt. This is left to the discretion of the liquidator. A proof of debt may be admitted for dividend either in whole or in part, or may be rejected, in which case the liquidator must send to the creditor a written statement of his reasons. A creditor who is dissatisfied with the liquidator s decision on his proof may apply to the Grand Court for the decision to be reversed or varied, within 21 days of the receipt of the liquidator's statement of reasons. The court will direct how the matter is to proceed, depending on the extent of factual dispute. There are no statutory provisions restrictive of the purchase, sale or transfer of claims against the company. 22. Priority Claims: What are the major (a) governmental and (b) non-governmental privileged and priority claims in liquidations and reorganisations? Which priority and privileged claims have priority over secured creditors? Governmental priority claims include all taxes due within 12 months before the date of the windingup resolution or order (defined as "the relevant date"). Non-governmental priority claims include wages or salary in respect of services rendered to the company within a short period of the relevant date and certain qualifying deposits at a licensed bank being wound up. The above-mentioned governmental and non-governmental priority debts rank equally among themselves and are paid pari passu. These debts have priority over the claims of debenture holders under any floating charge created by the company and are to be discharged forthwith, subject to the retention of funds for the costs and expenses of the winding up. 7

11 23. Distributions: How and when are distributions made to creditors in liquidations and reorganisations? Before declaring a dividend, the liquidator must give notice of his intention to do so to all creditors whose addresses are known to him and who have not proved their debts and must state in the notice his intention to declare a dividend within the period of 4 months from the last date for proving specified by him. The liquidator may not declare the dividend so long as there is pending any application to the court to reverse or vary a decision of his on a proof, or to expunge a proof, or to reduce the amount claimed, except with the leave of the court. Thereafter, the liquidator gives notice of the dividend to all creditors who have proved their debts, setting out (inter alia) the total amount to be distributed, the rate of dividend, and whether and if so when any further dividend is expected to be declared. In a reorganisation pursuant to a scheme of arrangement (see 9) any distribution to creditors will take place in accordance with the terms of the scheme. 24. Voidable Transactions: (a) What types of transactions can be annulled or set aside in bankruptcies and what are the grounds? What is the result of a transaction being annulled? (b) Does your country use the concept of a Suspect Period in determining whether a transaction by an insolvent debtor can be annulled? (If so, how is the Suspect Period established?) Can voidable transactions be attacked by secured creditors or by unsecured creditors or only by a Liquidator or Trustee? Can they be attacked in a reorganization or suspension of payments or only in a liquidation? When any company is being wound up by the court or subject to the supervision of the court, all dispositions of the property of the company and every transfer of shares in the company made between the date of presentation of the petition and the order for winding up are void, unless the court orders otherwise. In addition, any dealing with the property of the company within 6 months before the commencement of a winding up which was done in favour of any creditor, with a view to giving such creditor a preference over the other creditors can be set aside by the court on the application of the liquidator. The Fraudulent Dispositions Law (1996 Revision) (which applies generally and is not dependant on there being a liquidation or a reorganisation) also provides that every disposition of property made with an intent to defeat an obligation to a creditor and at an undervalue is voidable on the application of a creditor thereby prejudiced made within 6 years of the date of the disposition. Such a disposition could be set-aside only to the extent necessary to satisfy the obligation to the applying creditor together with costs at the court's discretion. In addition, if the court is satisfied that the transferee has not acted in bad faith, the disposition will be set aside subject to the proper fees, costs, pre-existing rights, claims and interests of the transferee. 25. Directors and Officers: (a) Are corporate officers and directors liable for or can they be made to pay obligations owed by their corporations (e.g., amounts owed to Government authorities)? (b) Do corporate officers 8

12 and directors have any liability for pre-bankruptcy actions by their companies? Can they be made subject to sanctions or penalties for other reasons? a. There are no statutory provisions providing for such a liability consequential on the liquidation or reorganization of a company. b. There are no express statutory provisions in respect of fraudulent or wrongful trading by directors and officers. Directors do not expose themselves to personal liability merely by causing the company to break its contractual obligations, for example, in order to assist the company in trading out of its financial difficulties. However, failure to wind up a company as soon as they become aware that the company is insolvent and that it will not be able to trade out of its difficulties, may expose directors to a claim for misfeasance or breach of trust by any official liquidator, creditor or contributory of the company. In addition where in the course of the winding up of a company it appears that any director or officer of the company has misapplied or retained in his own hands or become liable or accountable for any money of the company, the court may compel him to repay such moneys or to contribute such money to the assets of the company by way of compensation as the court thinks just. 26. Creditors Enforcement: Are there processes by which some or all of the assets of a business can be seized outside of Court proceedings? How are these processes carried out? Creditors may enforce certain proprietary and contractual rights without an application to the court e.g. pursuant to hire purchase agreements, retention of title clauses, security documentation or, in the case of a landlord, a right to levy distress. 27. Corporate Procedures: Are there corporate procedures for the liquidation or dissolution of a corporation? How do such processes contrast with bankruptcy proceedings? Other than by winding up by or subject to the supervision of the court, or voluntarily (see 7 and 8) a company can be struck off the register and dissolved by administrative action. The Registrar may, if he has reasonable cause to believe that a company is not carrying on business or is not in operation, strike its name from the register, whereupon it is deemed dissolved. The company can itself request this. Any assets belonging to the company when it is struck off vest in the Crown for the benefit of the Cayman Islands. The company or any shareholder or creditor may apply to the courts within, in most cases, two years of the striking off for the reinstatement of the company. The main advantage of this administrative method of dissolution is that it is relatively simple and inexpensive. The main disadvantage is that there is no control over its timing, which is in the hands of the registrar. Also, this method cannot be used where the company has outstanding unsatisfied liabilities (although non-payment of the government fees may result in the registrar striking the company off in due course in any event). 9

13 28. Conclusion of Case: How are liquidation and reorganisation cases formally concluded? In a winding up by or subject to the supervision of the court, there are two methods for concluding the liquidation: (i) (ii) When the affairs of the company have been completely wound up, the official liquidator can apply for an order that the company be dissolved. Alternatively the liquidator may simply notify the registrar that the affairs of the company are fully wound up. The registrar may then strike the company off the register and the company is dissolved. Such a dissolution may be reversed by the court on application by the company itself, any member or creditor who is aggrieved by it. In a voluntary winding up, once the affairs of the company are fully wound up, the liquidator must make a report showing how the winding up has been conducted, account for the disposal of the company's property and call a general meeting of the shareholders of the company to lay the report before them. Following such meeting the liquidator makes a return to the registrar of the holding of the meeting. Three months from the date of registration of this return the company is deemed to be dissolved. A reorganization effected through a scheme of arrangement is concluded in such a manner as is provided for under the terms of the scheme. 29. UNCITRAL Model Law: Is the adoption of the UNCITRAL Model Law on Cross-Border Insolvency under consideration in your country? If so, what is the present status of this consideration? The adoption of the UNCITRAL Model Law is not under consideration but its theme of international co-operation is reflected in proposed new Companies legislation currently being formulated by the leading insolvency professionals in the Cayman Islands. 30. International Cases: What recognition or relief is available concerning an insolvency proceeding in another country? How are foreign creditors dealt with in liquidations and reorganisations? Are foreign judgments or orders recognised and in what circumstances? Is your country a signatory to a treaty on international insolvency or on the recognition of foreign judgments? The court may recognise a liquidator appointed by a foreign court for the purposes of bringing proceedings in the Cayman Islands if there is a sufficient connection between the company and the foreign jurisdiction by which he was appointed. The Cayman Islands are not a signatory to any treaties on international insolvency. However, in international and cross border insolvency proceedings relating to BCCI (Overseas) Ltd. the Grand Court exercised its discretion to order that a committee of creditors should be established in the 10

14 Cayman Islands to bring the liquidation of the company into line with similar proceedings in other jurisdictions. In a winding up in the Cayman Islands, no distinction is drawn between domestic and foreign creditors. The Grand Court is entitled to request assistance in matters of insolvency from courts having jurisdiction in insolvency in any part of the United Kingdom. This procedure has been successfully invoked on a number of occasions. The Cayman Islands have enacted a Foreign Judgments Reciprocal Enforcement Law, which provides for the registration of foreign judgments in the Cayman Islands. However, this Law has so far only been extended to certain states and territories of Australia. Consequently, the recognition and enforcement of foreign judgments are determined according to the common law principles including in particular whether the foreign court had jurisdiction according to Cayman Islands Law. 31. Cross-Border Insolvency Protocols and Joint Court Hearings: In cross-border cases, have the Courts in your country entered into Cross-Border Insolvency Protocols or other arrangements to coordinate proceedings with Courts in other countries? Have Courts in your country communicated with or held joint hearings with Courts in other countries in cross-border cases? If so, with which other countries? The Grand Court has authorised cross-border protocols in relation, for example, to the pooling of assets and the sharing of information and costs. It has also made orders placing companies into provisional liquidation in order to facilitate their re-structuring through, for instance, Chapter 11 proceedings in the US. On occasion the Grand Court has communicated with or held joint hearings with courts in other countries including England, USA and Luxembourg. 32. Pending legislation: Is there any new or pending legislation affecting domestic bankruptcy procedures, international bankruptcy cooperation or recognition of foreign judgments and orders? Legislation in a preliminary draft form for a new Part V of the Companies Law and an entirely new Part XVI on international co-operation is under discussion by leading insolvency professionals in the Cayman Islands. The draft legislation is intended to continue the tradition of the Cayman Islands as a creditor friendly jurisdiction and to enhance the court s jurisdiction on international co-operation. The proposed amendments to Part V which are being considered include inter alia provisions dealing with the establishment of liquidation committees, the fixing of liquidators remuneration, statutory liability for fraudulent trading, company voluntary arrangements, an Insolvency Rules committee and requirements that official liquidators be qualified insolvency practitioners and that all voluntary liquidations be brought under court supervision unless the company is deemed to be solvent. It is also being proposed that the court would have jurisdiction to wind up foreign companies. The proposed new Part XVI would also expressly empower the court to make various orders ancillary to a foreign bankruptcy proceeding on the application of a trustee appointed in such a foreign proceeding. 11

15 33. Developments under the E.U. Regulation on Insolvency Proceedings: Please comment on any significant developments or recent decisions in your country involving the E.U. Regulation on Insolvency Proceedings. This Regulation is not applicable in the Cayman Islands. 12

16 For more specific advice on insolvency and restructuring in the Cayman Islands, we invite you to contact the following in the Litigation and Insolvency Practice Group: Andrew Bolton Partner, Group Head: Litigation and Insolvency Jeremy Walton ACIArb Partner, Litigation & Insolvency Appleby is one of the largest and most well respected offshore-based legal, fiduciary and administration service providers. With over 600 lawyers and staff, the organisation is uniquely positioned in the key offshore jurisdictions of Bermuda, the British Virgin Islands, the Cayman Islands, Jersey and Mauritius as well as the financial centres of London and Hong Kong. The group provides sophisticated, specialised services primarily in the areas of: Corporate and Commercial, Litigation and Insolvency, Trusts and Property. Complementing our legal expertise are our service companies, Appleby Corporate Services, Appleby Trust and Reid Management. Appleby's associated service companies provide clients with a range of supplementary services: Appleby Corporate Services provides corporate administration services to thousands of companies that have their registered offices in the offshore jurisdictions in which we are located. Appleby Trust consists of licensed trust companies in Bermuda, Cayman Islands, Jersey and Mauritius offering a comprehensive range of trust services. In Jersey, the group also provides employee benefits trusts, corporate and funds administration services. Appleby Securities (Jersey) Limited acts as a listing sponsor for the Channel Islands Stock Exchange. Reid Management Limited provides professional management, consulting and accounting services and also acts as a listing sponsor for the Bermuda Stock Exchange. Appleby is also a member of TerraLex, an international association of law firms; the World Services Group, a global multi-disciplinary network of service providers; and is represented in many of the major international legal organisations. This publication is intended only to provide a summary of the subject mattered covered. It does not purport to be comprehensive or to provide legal advice. No person should act in reliance on any statement contained in this publication without first obtaining specific professional advice. 13

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