19-Sep-11
START DATE
END DATE
26-Sep-11
IN THE MATTER OF CAI MASTER ALLOCATION FUND LTD and IN THE MATTER OF CAI ALLOCATION FUND LTD
COURT:
LAW:
JUDGE(S):
CLAIMANT'S LAWYER:
DEFENDANT'S LAWYER:
The Supreme Court of Bermuda
Corporate Insolvency, Segregated Accounts, Liquidation
KAWALEY J
Mr. Christopher Basile (Creditor) & Mr. Michael E. McMurtrey (Investor, SAC 7)
Mr. Narinder Hargun (Conyers Dill & Pearman) for the JPLs
FACTS OF THE CASE:
The Bermuda Monetary Authority petitioned for the winding-up of CAI Master Allocation Fund Ltd. and CAI Allocation Fund Ltd. The Joint Provisional Liquidators (JPLs) sought court guidance on whether investor funds sent to the Feeder Fund for shares that were never issued should be returned and whether SACs (Segregated Accounts) could be liable for each other's debts. The ruling clarified how liquidators should treat unissued shares and whether assets in one SAC could cover liabilities in another.
SUMMARY:
(1) Should investor funds for unissued shares be refunded? (2) Can assets in one SAC be used to pay liabilities of another? (3) What are the rules for JPL remuneration in SAC liquidations?
OUTCOMES:
JPLs directed to return investor funds where no shares were issued; SACs held as separate entities, preventing cross-account liability.
RULED IN FAVOUR OF:
Joint Provisional Liquidators (JPLs) (Plaintiff).
PLAINTIFF/CLAIMANT
DEFENDANT:
DURATION (DAYS):
ISSUES:
RELEVANCE:
RULING:
RULING TYPE:
CASES CITED:
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IN THE MATTER OF CAI MASTER ALLOCATION FUND LTD and IN THE MATTER OF CAI ALLOCATION FUND LTD
The Bermuda Monetary Authority petitioned for the winding-up of CAI Master Allocation Fund Ltd. and CAI Allocation Fund Ltd. The Joint Provisional Liquidators (JPLs) sought court guidance on whether investor funds sent to the Feeder Fund for shares that were never issued should be returned and whether SACs (Segregated Accounts) could be liable for each other's debts. The ruling clarified how liquidators should treat unissued shares and whether assets in one SAC could cover liabilities in another.