Maples Delivers the First Cayman Islands DIP Finance Scheme of Arrangement
Maples and Calder acted for the applicant creditor in the successful restructuring of Schahin II Finance Company (SPV) Limited, a Cayman Islands note issuing vehicle, in order to inject US$15 million of debtor in possession ("DIP") priority rescue finance. The restructuring, which was implemented by way of a scheme of arrangement, required the terms of the original New York law governed notes to be amended to permit a senior ranking new tranche of notes to be issued. The scheme was granted recognition and enforcement in the US under chapter 15 of the US Bankruptcy Code.
The injection of finance meant that an imminent fire sale of the underlying collateral (a Marshall Islands flagged drill ship) was avoided and creditors have been given the chance of achieving a better return in the future. This is one of the first times a scheme has been used to provide DIP rescue finance and may signal the start of a new trend in light of the Noble decision from the English High Court which followed hot on the heels of Schahin.
The Cayman Islands team was led by partner Caroline Moran and of counsel Nick Herrod, with associates Christian La-Roda Thomas and Ryan Hallett.
The US team was led by partner Tim Graulich and associates Stephen Piraino and Natasha Tsiouris of Davis Polk & Wardwell LLP.