2020 Voluntary Liquidations

Daniel McGrath

 - 22 October 2020

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As 2020 draw to a close and we reflect on the year’s challenges, it is also important to plan ahead to ensure that entity closures are handles in a timely and efficient manner.

R&H Restructuring is expereinced in delivering successful wind-downs and offer a wide range of flexible services to open minded and close- ended funds in the Cayman Islands that are wanting to close out their affairs. We can guide clients through the process, ensuring that the scope of our engagement and timeline are specific to their requirements.

Our services include acting as voluntary liquidator, wind-down agent and the provision of liquidating trust, the objective of which is to expedite the process and to create efficiencies, allowing investors to receive proceeds in an orderly manner. Our Services can also be paried with the ability to deal with residual assets such as managing asset auctions or asset realization in the secondary market.

Key Considerations

         •  Regulatory Requirements

Matters for consideration when determining the timing of your voluntary liquidation incude the payment of final distributions to investors, filing of final audit financial statements with the Cayman Islands Monetary Authority (CIMA) and any further reporting to the Cayman Islands Tax Authority.

We also note that with the continued increase in regulatory costs and requirements, in particulate the recently implemented CIMA Administrative Fines Regime, it is important to engage a voluntary liquidator who has the knowlegdge and expertise in dealing with regulatory matters, thus mitgating the risk of potential fines.

          •  Audit Exemption

Where applicable, CIMA Regulatory Policy many enable a fund in License under Liquidation status to request an exemption and submit a voluntary liquidator’s extended report in lieu of the final stub audit. This can be an effective cost and time saving alternative to performin a final audit, subject to approval of the exemption by CIMA.

We can assist with the preparation of this extended report and agree its scope and fee specific to your requirements .

           •  Timing

In order to avoid unnecessarily incurring annual registration fees in 2021, the following deadlines must be met:

The deadline for the last regularly scheduled Gazette issue of 2020, which will allow us to comply with our statutory obligations and meet the 29 January 2021 Government deadline, is 9 December 2020 ( based on a clean liquidation with no residual issues to be resolved).

This is the latest date that voting shareholders/members/general partners can pass appropriate resolutions, without incurring additional advertising costs.

Where possible, we suggest that discussions regarding the voluntary liquidation process begin at the earliest possible opportunity and that the winding up commences well in advance of the 9 December 2020 deadline, this is particularly important where there are residual assets, creditors or other matters requiring resolution prior to closure.

Our Services

Daniel McGrath

Danny is a Senior Manager in R&H Restructuring (Cayman) Ltd and leads the solvent wind-down business line, providing liquidation, wind-down management and liquidating trust services to a wide range of companies and investment vehicles, including hedge funds, trusts, private equity funds, multi-manager funds and emerging market funds across the Cayman Islands, Germany, Italy, Switzerland, the…