INSOLVENCY practitioners expect to see a hike in cross-border insolvencies with the Cayman Islands pinpointed as a preferred offshore jurisdiction.
Research commissioned by Grant Thornton and barristers chambers South Square, found that around two thirds of insolvency practitioners expect the number of insolvencies involving offshore jurisdictions to increase over the next three years as a result of an uplift in activity in financial services.
IPs want to see collaboration between offshore jurisdictions rise further up the agenda, with three quarters suggesting that courts in different jurisdictions should collaborate more to make multi-jurisdictional insolvencies fairer and more efficient.
Steve Akers, recovery and reorganisation partner at Grant Thornton, commented: “With an anticipated uptick in cross-border insolvencies on the horizon, jurisdictions need to ensure their basic legal process and infrastructure is fit for purpose.
“Clearly, no single jurisdiction has got everything absolutely right, so we should be encouraging a wider debate about how all those involved in the legislative and judicial process might learn from each other and work more closely together to help ensure consistent and reliable standards are in place around the world.”
The Cayman Islands was pinpointed as a preferred offshore jurisdiction for having the most effective insolvency laws, followed by the British Virgin Islands and Hong Kong.
Singapore emerged as a very effective location for cross-border insolvency for those with direct experience of multi-jurisdictional insolvency in the territory but was ranked poorly by respondents who provided feedback on the jurisdiction without direct experience there, indicating a potential gap in perception.
The top three factors when evaluating the attractiveness of a jurisdiction are: its legal process and infrastructure, cross-border assistance provisions and enforceability of foreign court orders and judgements.
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