The Cayman Islands recorded an increase in insolvency petitions in 2015, contrasting with a general decline in the majority of offshore jurisdictions.
There were a total of 71 petitions filed in Cayman courts compared to 58 filings in 2014 and only 43 filings in 2008, according to report by offshore law firm Appleby.
The share of petitions that resulted in a court order has also increased from 62 percent in 2014 to 73 percent last year. On average it took the Cayman court five weeks to issue an order.
The report “Snapshot: 2015 Offshore Company Petition Filings & Court Orders,” which examines petition filings and the resulting court orders in Bermuda, the British Virgin Islands, Cayman Islands, Guernsey, the Isle of Man and Mauritius, highlighted that total filings fell in all of the jurisdictions with the exception of Cayman, where there was a 22 percent increase, and Mauritius, which saw a 5 percent increase.
However, the rise in Cayman Islands filings led to an overall increase of 4 percent for the offshore markets.
In total, there were 247 petitions filed across four categories of petitions analyzed in the report: winding up petitions; conversion of voluntary liquidation to court supervised liquidation; schemes of arrangement; and capital reduction.
When looking at offshore jurisdictions as a whole, the broadly flat figures recorded for 2015 reflect a continuing leveling off in the number of filings since the high point of 2013. Prior to that year, the highest point of filings recorded was in the years immediately following the 2008 global financial crisis.
“In the wider context, to some degree the figures reflect positive changes in global macroeconomic conditions over the course of 2015,” said Tony Heaver-Wren, a dispute resolution partner in Appleby’s Cayman office. “However, as the insolvency petition filing statistics in the Cayman Islands and early indications of 2016 filings suggest, this overall trend of dwindling petition fillings is not anticipated to continue.
“This last year saw some of the first casualties in the energy sector, which is likely to continue into 2016 and beyond, as well as significantly more winding up petitions in respect of Chinese enterprises,” he added.
“In Cayman, there was a 92 percent increase in the number of petitions to convert a voluntary liquidation into a Court supervised liquidation, reflecting the market’s take-up of the time and cost efficient alternative for initiating a liquidation within the auspices of the Cayman court.”