The total number of winding up petition filings in offshore jurisdictions dropped by more than a third in 2018 compared with the previous year, with early signs that 2019 will continue this trend, according to a report from offshore law firm Appleby.
The firm’s report, Offshore Corporate Insolvency & Restructuring: Annual Review & Current Trends, examines company petition filings and any resulting court orders in Bermuda, the British Virgin Islands, Cayman Islands, Guernsey, the Isle of Man and Mauritius.
“Last year saw a significant drop in the number of insolvency petitions filed in offshore jurisdictions and 2019 appears to be continuing this easing of filings, despite widespread anticipation of global slow-down during the period,” said Tony Heaver-Wren, Partner and Co-Head of Insolvency and Restructuring in Appleby’s Cayman office.
In 2018, Bermuda, Isle of Man and Guernsey all showed steady levels of activity in line with previous years, while Mauritius and BVI filings returned to previous years’ levels after experiencing a bump in activity in 2017.
Cayman bucked the global trend as petitions rose 50% in 2018, partly as a result of a group of seven companies being liquidated after becoming embroiled in real estate investment fraud in the US.
The report examined notices published across four categories: compulsory winding up filings; conversion of voluntary liquidation to court supervised liquidation; schemes of arrangement; and capital reduction.
A total of 193 compulsory winding up petitions were submitted to offshore courts in 2018, down 35% from the previous year, with 105 winding up orders made. Across the offshore region, the average conversion rate of petitions to orders was 62%, with the remainder either failing or being resolved.
The report found that up to 1 June of this year, 62 compulsory winding up filings have been recorded across the surveyed jurisdictions, with 26 winding up orders made so far.