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In the context of investment funds, the “minority” frequently includes shareholders who are a majority, in terms of their economic interest, but are minorities in the sense that they have no voting power to control decisions of the company.
Prior to March 1, 2009, Cayman Islands courts had few alternatives to assist oppressed minorities beyond the dire remedy of winding up the company, where a minority shareholder could establish that it was “just and equitable” to do so. Following amendments to the Cayman Islands Companies Law effective March 1, 2009, the court was empowered to make orders regarding the future conduct of the company’s affairs, to force a buyout of one’s shares and grant injunctive relief, among others, as alternatives to winding up.
While this is a recent development in Cayman Islands law, such alternative remedies are well established in many commonwealth jurisdictions and are typically referred to as the oppression remedy. Unlike the statutory language of other commonwealth jurisdictions, the Cayman Islands provision does not appear to provide for a stand-alone remedy; rather it is integrated within the winding up provisions. Back in April 2009, we commented that this statutory language left some ambiguity and we posed the following two questions:
Almost five years on, we now consider whether these questions have been answered.
To continue reading full articles in PDF format:
Almost Five Years On: Does Cayman Have a Minority Shareholder Oppression Remedy?
This article originally appeared in issue no. 34 of the Cayman Financial Review and has been published with permission from the publication.