The Grand Court has granted the Cayman Islands Monetary Authority’s petition for the winding-up of Beechwood Re, a reinsurance firm being sued for fraud in the U.S., and with ties to a hedge fund whose former executives are facing civil and criminal fraud charges in the U.S.

Grand Court Justice Nicholas Segal made the order to wind up Beechwood Re after acknowledging evidence that the reinsurer has had a “history of regulatory breaches,” appears to have been involved in a fraudulent scheme, and faces multiple lawsuits.

Beechwood Re has financial ties to the U.S. hedge fund Platinum Partners. Allegations against the two entities include that they shared mutual beneficial owners, who enriched themselves by siphoning Beechwood Re assets that should have been distributed to other parties.

According to CIMA’s winding-up petition, the regulator first became aware of allegations of fraud and criminal activity against companies associated with Platinum Partners – including Beechwood Re – in 2016.

CIMA also stated that Beechwood Re breached multiple local regulations by failing to file annual returns and failing to maintain minimum capital and solvency requirements.

After multiple alleged breaches, CIMA appointed accountants from Deloitte to serve as control of the affairs of Beechwood Re in July 2017.

In a March 27 report on the state of Beechwood Re, the controllers found that the reinsurer was likely to run out of cash to meet its obligations within several months, according to CIMA’s petition.

Given that report, CIMA stated that it decided to revoke Beechwood Re’s license and apply for the Grand Court to order the company to be wound up.

The Grand Court’s order appoints the Deloitte controllers as Beechwood Re’s liquidators, and allows them to participate in the multiple legal proceedings taking place in the U.S.

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