Fri, Oct 28, 2016
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Grand Court of Cayman finds Weavering Macro hedge fund directors guilty of willful negligence or default

Friday, August 26, 2011
Opalesque Industry Update - The Grand Court of the Cayman Islands has, for the first time in the context of a failed investment fund, found two directors guilty of willful neglect or default in the discharge of their duties, international law firm Ogier informed Opalesque today.

The proceedings, brought by the joint official liquidators of the failed investment fund, Weavering Macro Fixed Income Fund, sought damages against each director flowing from their decision not to take any, or any meaningful, role in the business of the Fund, and their decision to simply sign documents which were put before them, without applying their minds to their content.

Like many Cayman Islands investment funds, the directors were afforded the benefit of an indemnity under the terms of the Fund's constitutional documents, that indemnity covering all losses, save for those occasioned by the directors' own wilful neglect or default. The Court found that the directors' conduct fell well below that which was required of them, and unequivocally concluded that they were guilty of wilful neglect or default.

The decision, by which judgment was given against each of the directors in the sum of US$111m, confirms that although Cayman Islands investment funds may be structured differently to traditional corporate entities, in particular by the appointment of, and delegation of powers to, services providers (such as an investment manager), the fundamental duties owed by a director of a Cayman Islands investment fund are the same as those duties owed by a director of any other corporate entity.

"The case shows that directors of Cayman Islands investment funds cannot sit idly by, leaving the management and control of the fund to its service providers. A director's duty to supervise the affairs of the company, and to exercise reasonable care, skill and diligence are non-delegable” said Shaun Folpp, Managing Associate at Ogier Cayman who, together with Will Jones, Associate, acted for the successful Plaintiff, led by David Lord QC.

“Directors of Cayman Islands investment funds can no longer live under the misconception that they are immune from liability for a company's losses if they do not themselves take an active role in the company's business" added Folpp. Corporate website: Source

The full judgement text can be downloaded from Opalesque: Source

- FG

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. David Einhorn speaks on passive investing, Mylan, his cheapest stock, the Fed[more]

    From Greenlight Capital hedge fund manager David Einhorn (Trades, Portfolio) joined nine other famed investors on Tuesday to talk about stocks at the annual Great Investors’ Best Ideas Investment Symposium in Dallas. Presenters at the annual conference typically pitch one or severa

  2. Investing - Fund set up to buy illiquid hedge fund stakes finds plenty of opportunities, Lansdowne's Roden says likes animal genetics company Genus[more]

    Fund set up to buy illiquid hedge fund stakes finds plenty of opportunities From As ValueWalk reported back in February, earlier this year Andrew Lawrence set out to raise $250 million to $500 million for a fund that will buy stakes in hedge funds that have suspended redem

  3. Opalesque Roundtable: Style drift, poor communications and credibility fatigue are biggest red flags for hedge funds investors[more]

    Komfie Manalo, Opalesque Asia: Style drift, poor communications and credibility fatigue are the biggest red flags for hedge funds investors, said participants of the latest 2016 Opalesque Investor Roundtable, sponso

  4. Barclay CTA Index down 0.40% in September (+0.10% YTD)[more]

    Managed futures traders lost 0.40% in September according to the Barclay CTA Index compiled by BarclayHedge. The Index is up 0.10% year to date. “The US Fed, in spite of its hawkish tone, opted to hold rates steady which roiled financial markets,” says Sol Waksman, founder and president of BarclayHe

  5. Opalesque Exclusive: Meet Emma, your friendly A.I. helper[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: Shaunka Khire, who co-designed an artificial intelligence (AI) robot called EMMA/MANSI, talks to Opalesque