In a recent judgment,
On
On
The Debtor's expert set out the issues as agreed but the Petitioner's expert failed to do so in a manner that matched the points at issue.
The Debtor sought a three-month adjournment of the hearing of the petition while the Petitioner argued that the Court could hear the petition on the basis of the evidence before it. The Debtor accepted that it was cashflow insolvent but sought to argue that a restructuring was still under consideration.
He also considered the relevant authorities (ACL Asean Tower Holdco and his own decision of
- if a creditor with standing to make an application wants to have a company wound up and the Court is satisfied that the company is unable to pay its debts, a winding up will follow, unless there are some special reasons why it should not
- in practice, the Court will only adjourn if there is credible evidence that there is a reasonable prospect that the petition debt will be paid within a reasonable time
- the Court will be more inclined to give a short adjournment than a long one
-
the Court will be cautious and wary (
Justice Kawaley had used the term "leery") in respect of any last-minute adjournment applications - the Court will consider the views of creditors as a whole and give greater regard to those who are independent of the company
- however, the decision whether to grant an adjournment is a discretionary case management decision and the Court will bear in mind a variety of conflicting interests in arriving at a fair, realistic and practical decision
Following his views on the available evidence,
In practice, there are a few ways in which a party may obtain the adjournment of a winding up petition, but these require evidence that demonstrate to the petitioner and the Court that genuine steps are being taken to effect payment. Historically, we have included evidence of the debt sum being preserved, the use of escrow accounts or the appointment of experts or experienced professionals to act in relation to the debts sought*. Now the restructuring officer regime is available to provide a moratorium if there is a genuine prospect of restructuring (see our article on the Cayman restructuring office regime). It is in the creditor's own interest to get paid without invoking the collective liquidation process but ultimately the earlier steps are taken the more credible these will likely appear to be, either to the creditor or to the Court.
* Please note that if your excuse is that your registered office provider failed to pass on the statutory demand, you need to contact us to replace your registered office provider, that will not attract any sympathy from the Court.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
Ogier
44 Esplanade
JE4 9WG
JERSEY
Tel: 534514000
Fax: 534514444
URL: www.ogier.com
© Mondaq Ltd, 2023 - Tel. +44 (0)20 8544 8300 - http://www.mondaq.com, source