By Victor Murray, LLB, PG Dip LP, Accredited Director and who has been resident in the Cayman Islands from 2002. He is the Assistant Secretary of the Cayman Islands Directors Association. He is admitted as a Lawyer in New York and as a Solicitor in Scotland. He has considerable offshore fund experience as in-house counsel for Citco and thereafter as a director of many hedge funds.
Following the Weavering decision what should a Cayman Islands fund expect from their directors?
Although the recent Weavering case (Weavering Macro Fixed Income Fund 26 August 2011) did not create any new law, it does provide some insight as to the basic minimum standards that should be expected from a fund director at least by the Cayman Islands Court.
In the Weavering case the directors of the fund were found not to meet basic standards in relation to the discharge of their fiduciary obligations. The judge in the case stated that the Cayman Islands funds industry “…works on the basis that investment management, administration and accounting functions will be delegated to professional service providers and a company’s independent non-executive directors will exercise a high level supervisory role.” There was no evidence of the directors of Weavering asking any questions of any service providers.
The judge further went on to say that the directors of the Cayman Islands fund must: