Sun, Feb 18, 2018
A A A
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. Chenavari, a $5.4bn hedge fund, told investors it thinks 'we could experience a similar pattern as the 1987 crash'[more]

    From Businessinsider.com: A $5.4 billion hedge fund told clients markets could tumble just like they did in the 1987 crash. In a February 14 letter to clients, London-based Chenavari Investment Managers warned about current market conditions. From the letter (emphasis added): "Our view is that

  2. Active funds shone in selloff, just like they said they would[more]

    From Bloomberg.com: For years, it's been the same refrain. Don't bail on active management, you'll regret it when the market turns sour. And while the selloff that ripped through equities this month has been too short to prove anything, early returns suggest they had a point. Thanks to differentiate

  3. No place to hide: managed futures funds fall with stocks[more]

    From Barrons.com: Managed futures mutual funds haven't lived up to their billing of providing uncorrelated returns so far in 2018, continuing a disappointing multiyear stretch. The $10 billion AQR Managed Futures Strategy, the largest fund by a wide margin in the category, was down 2.75% year-to-dat

  4. Investing - Hedge fund Bridgewater makes $22 billion bet against European firms, Hedge funds Steadfast and Suvretta jump onto CSX in fourth quarter, Tepper's Appaloosa boosts Apple, Facebook as others bolt, Third Point buys Netflix and MGM, dumps Bank of America, Moore Capital bought Wynn Resorts, other casino stocks before Steve Wynn resigned[more]

    Hedge fund Bridgewater makes $22 billion bet against European firms From Reuters/USNews.com: Bridgewater has shown its hand in Europe with a $22 billion bet against some of the continent's biggest companies, filings reviewed by Reuters show, part of a bigger shift by the world's largest

  5. Funds Profiles - Brother-run hedge fund up 46% in 2017 says Kelly formula shows diversification is flawed, How a 6,000% profit on a single trade saved a small hedge fund from disaster[more]

    Brother-run hedge fund up 46% in 2017 says Kelly formula shows diversification is flawed From Valuewalk.com: When Jeremy and Michael Kahan consider the notion of diversification, the wince. With a return of 45.8% to end 2017, their stock-picking fund, North Peak Capital, successfully