Cayman Funds In Voluntary Liquidation

by Amanda Banks, for LawAndTax-News.com, London

30 June 2008

The Cayman Islands Monetary Authority (CIMA) has confirmed that three CIMA-registered investment funds and a fourth fund, not regulated by CIMA, have been placed into voluntary liquidation by the funds' shareholders.

The entities, which are all Cayman-domiciled, are Grand Island Commodity Trading Fund I, Grand Island Commodity Trading Fund II, and Grand Island Income Fund, which were registered by CIMA in 2006, and Grand Island Master Fund, which is unregulated.

The shareholders appointed David Walker and Nick Freeland of PricewaterhouseCoopers as the Joint Voluntary Liquidators (JVLs) at an extraordinary general meeting on 17th June. The action was taken, with CIMA's knowledge, following the discovery of irregularities in the funds' trading activities.

The liquidators have indicated that they will be applying to the Grand Court of the Cayman Islands for the liquidation to be brought under the court's supervision. Court-appointed supervision would give the JVLs' greater powers and the ability to be recognized by, and gain assistance from, foreign courts, and would impose a moratorium on claims by third parties. It is CIMA's expectation that the funds will be placed under the supervision of the courts as soon as possible.

CIMA is continuing its own investigation into the matter and will work with the courts and/or the liquidators to bring about the proper winding up of the funds.

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