No Recognition in the Bahamas for Cayman Island Bank Liquidators

15 April 2016 – The liquidators of Caledonian Bank in the Cayman Islands requested the Bahamian court for the recognition of their position. They requested the court’s endorsement to represent Caledonian Bank in the Bahamas, as well as to acknowledge the Cayman proceedings as foreign procedures under Section 253 of the Bahamian Companies Winding-up Amendment Act 2011. This would enable the Cayman liquidators to take steps in the Bahamas to collect funds and/or claim property owned by the company, as part of the ongoing liquidation process in the Cayman Islands.

The proceedings in the Cayman Islands have already made their way to other jurisdictions where assets of the bank are located. In accordance with the Liquidation Order issued by the Cayman court, the Cayman liquidators are authorized to take any legal action they deem appropriate, either on behalf of the company or on behalf of the company; and initiate wind-up bankruptcy and/or recognition procedures in other jurisdictions, as the liquidators deem necessary and appropriate.

Based on Section 253 of the Bahamas Constitution, the Bahamian court determined that neither the Cayman proceedings nor the Cayman liquidators fit the statutory definitions of foreign proceedings and foreign representatives, since the Cayman Islands did not fall within the definition of a relevant foreign country. It was concluded by the court that the petitioners were not entitled to statutory aid since they had not been designated liquidators of Caledonian Bank for the purposes of a “judicial or administrative proceeding” in a foreign country that the Liquidation Rules Committee had identified as a “relevant foreign country”.