Duties as Directors of Cayman Islands Companies

Stuarts litigation and dispute resolution attorneys have extensive expertise in advising companies and individuals on their duties as directors of Cayman Islands companies, having helped a wide range of global and local insurance firms and multiple international investment management firms.

Directors of Cayman Islands companies owe both common law and fiduciary duties. These duties are owed to the company, although, in certain circumstances, these duties may be owed to creditors of the company. 

Stuarts Litigation and Dispute Resolution department regularly advises individuals on their duties as directors of Cayman Islands companies. Many of these instructions arise out of threatened or actual claims advanced in an insolvency context, either by liquidators or company creditors. These claims may include allegations of trading whilst insolvent, preferential payments and transactions allegedly at an undervalue.

Our litigation attorneys have deep knowledge and experience in dealing with reviewing and advising on the impact of indemnity protection in Articles of Association and on coverage under D&O insurance.

Recent examples of our work in this field include:

• Representing a director accused of breaches of directors’ duties in substantial legal proceedings brought by the liquidators of two Cayman Islands mutual funds, including allegations of 1.) overpayment of management fees, subscription fees, advisor’s fees, administration fees director’s fees and director’s expenses, 2.) making preferential payments to a related entity, 3.) entering into transactions at an undervalue, 4.) entering into transactions at an overvalue, 5.) unjust enrichment, 6.) fraudulent trading and 7.) unlawful means conspiracy.
• Providing extensive advice for use in foreign proceedings on Cayman Islands law regarding the extent that a director owes any duties to a company’s creditors.
• Advising the directors of a company in relation to allegations of wrongdoing by a former shareholder of the company whose shares had been compulsorily repurchased by the company. 
• Advising two Cayman Islands entities regarding claims against a former director for alleged breaches of his directors’ duties.
• Working with Counsel in Bermuda regarding claims for alleged breaches of directors’ duties in making various improper payments totaling over US$22 million.
• Representing the director of two Cayman Islands entities against allegations of breach of directors’ duties in the disposal of the companies’ assets, allegedly at an undervalue. 
• Advising and acting in derivative proceedings.

See more information on Shareholder Disputes and Derivative Actions.