Re Intl Credit & Inv Co(Overseas) Ltd

• Jurisdiction: Cayman Islands
• Judge: (Harre, J.)
• Judgment Date: 30 April 1992
• Court: Grand Court (Cayman Islands)
• Date: 30 April 1992

Grand Court

(Harre, J.)

IN THE MATTER OF INTERNATIONAL CREDIT AND INVESTMENT COMPANY (OVERSEAS) LIMITED

R. Denman for the petitioner;

N. Clifford for the provisional liquidators;

Ms. J. O”Connor Connolly for the creditor.

Cases cited:

(1) Arrows Ltd., Re, [1992] BCC 121, dicta of Hoffmann J. applied.

(2) Esal (Commodities) Ltd., ReUNK(1988), 4 BCC 475, dicta of Dillon J. applied.

(3) Maxwell Communications Corp., PLC, Re, [1992] BCC 372, dicta of Hoffmann J. applied.

Companies-liquidators-liquidation of group of companies-common liquidator may be appointed to different companies within same group in complex insolvency-within competence of experienced liquidator to cope with potential conflict of interests within group-court able to appoint independent liquidator when necessary

The petitioner applied for the winding up of a Cayman company and for the appointment of official liquidators.

The Cayman company, International Credit & Investment Company (Overseas) Ltd. (‘ICIC Overseas’) had had its banking and trust licences revoked after its auditors alleged serious fraud and company records showed that it lacked the liquidity to operate as a bank or meet its liabilities. It was an associate company within the BCCI group of companies which was being investigated for international fraud. Two other Cayman companies within this group, Bank of Credit & Commerce International (Overseas) Ltd. and Credit Finance Corp. were already in liquidation and their official liquidators were the provisional liquidators of ICIC Overseas. As provisional liquidators they had already initiated certain proposals to be carried out within stated deadlines which were intended to be for the benefit of the creditors of ICIC Overseas.

The petitioner applied for the provisional liquidators to be made the official liquidators even though there was likely to be a conflict of interest due to the substantial claims and counterclaims expected to arise between the members of the BCCI group. Their appointments as official liquidators were unopposed but the court was asked to advise on the appropriateness of the procedure.

Held, granting the application:

Even though the appointment of the same liquidators to two different companies within the same corporate group could potentially give rise to a conflict of interests with respect to the merits of the claims by each company, this was not in itself an adequate reason for opposing the appointment. Given the extent of the financial dealings of the companies, the complexity of the insolvency, the extensive investigation involved and the fact that official liquidators had already been appointed to one of the companies and had made considerable progress with the investigations, it would be altogether impracticable, unnecessarily expensive and time consuming to bring in new liquidators at this stage. In any case, the handling of cross-claims between the companies

and any consequent conflict of interest would be well within the competence of experienced liquidators and the court still had the discretion to resolve such issues by the appointment of an independent liquidator should it prove to be necessary at some later stage. At this stage of the proceedings, since there was no justification for appointing new liquidators and since the court was confident of the experience and integrity of the already appointed liquidators, it would confirm their appointment as the official liquidators (page 86, line 23 – page 88, line 6).

HARRE, J.: On April 29th, 1992 I made an order that
20	International Credit and Investment Company (Overseas) Ltd.
(‘ICIC Overseas’) be wound up and that Ian Wight, Robert
Axford and Michael Mackey be appointed official liquidators of
the company. The winding-up petition was not opposed and its
result was really inevitable. The fortunes of the company are
25	deeply involved with those of the insolvent corporate group
which has achieved worldwide notoriety under the generic name
of ‘BCCI.’ Its auditors have alleged serious fraud affecting its
fundamental financial viability and to the extent that it is possible
to obtain a picture of its financial state from its books and records
30	it lacks the liquidity to carry on a

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