New Judgment: HQP Corporation/Direct Lending

This concerns the “rule in Houldsworth”, which was abolished in the UK by provisions of the Companies Act. The CICA held that the rule in Houldsworth applies in the Cayman Islands to prevent existing or former shareholders who claim damages for misrepresentation against a company in liquidation from being admitted to proof in the liquidation. However, this only applies until the claims of ordinary unsecured creditors have been paid in full, with the misrepresentation claimants being entitled to prove thereafter alongside other subordinated shareholder claims.

Tom Smith KC and Annabelle Wang acted for the Liquidators in HQP Corporation and Tom Smith KC acted for the Liquidators in Direct Lending.

Read the full judgment here.