Cayman hedge fund judgement brings directors’ duties into focus
In August, the Grand Court of the Cayman Islands handed down its judgement in the case of Weavering Macro Fixed Income Fund Limited (in liquidation) v Stefan Peterson and Hans Ekstrom. It has triggered a frisson of excitement in the industry for the extent to which the court has sought to establish how directors of Cayman Islands open-ended funds should approach the discharge of their fiduciary and other duties to the funds of which they are directors.
Many practitioners have suggested that the judgment represents a panacea for the due discharge by directors of their duties, though a significant weakness of this analysis is that the Court’s considerations were cast in the light of, and informed by, the reported failings of the defendant directors of Weavering Macro Fixed Income Fund Limited.
Thus the Judgment should be treated as a baseline for performance by hedge fund directors of their duties in specific circumstances, and not to the exclusion of other relevant tenets of good governance and practice…
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The continuing obligations of Cayman Islands regulated funds are set out in the Companies Law and Mutual Funds Law (as amended).
The Cayman Islands is one of the world’s leading offshore jurisdictions for the establishment of investment funds.