Carey Olsen

The firm is advising bondholders of China’s Luckin Coffee

History of the practice

Carey Olsen was formed in 2003 through the merger of two distinguished Channel Islands firms: Carey Langlois in Guernsey and Olsens in Jersey. Its modus operandi is to partner with international insolvency practitioners, onshore firms, accountancies and forensic practices to advise on Bermuda, BVI, Cayman, Guernsey and Jersey law.

Network

The restructuring and insolvency team is spread across the above five offshore locations, as well as in London, Hong Kong and Singapore. The firm opened its Singapore office in 2015 and its Hong Kong branch in 2016, to meet increased demand for offshore legal advice from groups operating in China and entities that raise funds in Singapore and Hong Kong.

Harneys partner James Noble moved over to Carey Olsen in November 2019 to lead the Singapore restructuring practice. The firm’s Hong Kong branch was managed by Michael Makridakis – who previously set up and led the firm's Cayman insolvency practice – until his departure from the firm in November 2019.

In November 2017, partner Michael Hanson launched a new association firm, Carey Olsen Bermuda.

Maples partner Alex Hall Taylor QC joined the firm in the BVI in September 2020 to head up the dispute resolution and insolvency team there, as Ben Mays retired from the Carey Olsen partnership to pursue interests outside of the legal profession. The firm also snagged Jeremy Lightfoot from Campbells in February 2020 to head its Hong Kong dispute resolution and restructuring team. These were two of three partner hires that year, with two more joining as counsel.

Who uses it?

The firm’s institutional client base includes all types of investment managers, from private equity and venture capital firms to banks, real estate companies, financial services providers and corporate and private trusts.

It is also well known for advising liquidators and other stakeholders in asset recovery actions relating to fraudulent investment schemes. For example, the firm represented the liquidators of Arck, a scheme that funnelled British investors' money through Jersey, allegedly to invest in real estate in Cape Verde.

The Guernsey Financial Services Commission, Jersey-affiliated entities of insolvent British retailer BHS and music retailer HMV Guernsey – a guarantor of a large chunk of its parent company's debt – are also past clients.

Historic track record

In the Arck case, the complex structure of Jersey corporate trust vehicles at the heart of the scheme and Jersey’s lack of a creditor-driven insolvency process were preventing UK liquidators from recovering any value for victims. The Jersey team got around this by making the UK liquidators shareholders of an asset holding entity, Arck Estrela, which had already been dissolved by a Jersey regulator for failing to file statutory returns. That process saw them dissolve a nascent trust that had been set up (in the firm’s own words) as the scheme's perpetrators “tried to cut and run”; they went on to give the UK liquidators title to shares in the trust and then re-registered Arck Estrela in order to amend its shareholders’ register. The UK liquidators were then able to apply, as shareholders, to wind up Arck Estrela and appoint KPMG as Jersey liquidators.

Partners John Greenfield and Elaine Gray in Guernsey successfully defended former Grant Thornton partner Stephen Ackers (now at litigation funder Therium) in a contempt of court claim resulting from his work as a liquidator of four BVI companies related to Guernsey-registered Tchenguiz Discretionary Trust. The firm continues to represent Ackers and Grant Thornton's Mark McDonald as liquidators of those four entities and 16 other trusts in Guernsey, all controlled by Tchenguiz.

In the Caribbean, meanwhile, Cayman partner Sam Dawson was counsel to a Luxembourg affiliate and creditor of helicopter group CHC, which filed winding-up proceedings against its parent in a deal with counsel to the parent’s directors. This helped the parent to get around the common law Emmadart principle that directors cannot initiate insolvency proceedings without shareholder approval. The parent then entered provisional liquidation in the Cayman Islands, as a Texas bankruptcy court approved a Chapter 11 plan for its international group entities and a Canadian court recognised the Texan proceedings.

Even before it had boots on the ground in Singapore and Hong Kong, the firm had already made inroads in the region, capitalising on Asia-related instructions. It was engaged by KPMG as liquidator of Chinese energy materials producer Green Holdings; by PwC as liquidator of a Cayman hedge fund; and by a US financial advisory firm as bondholder of Chinese cement maker China Shansui.

It also acted for Lloyds Banking Group as a creditor of Petroleum Pipe Group, an international group of oil companies with subsidiaries incorporated in the UK, the US, the UAE, Malaysia, Singapore and Cyprus. Several entities within the group are in liquidation in Jersey, the Cayman Islands and the UK.

In the BVI, the firm provided counsel to Ben Oldman Special Situations Fund, a lender by assignment under a US$80 million facility agreement provided to a Russian company in liquidation. Bermuda partner Keith Robinson also helped KrysGlobal as liquidators of Saab (Financial) Bermuda), the Bermudian arm of an international banking empire owned by Lebanese brothers Ayoub-Farid and Fadi Saab.

Recent events

As well as the additions of Hall Taylor and Lightfoot, Tim Wright rejoined Carey Olsen as partner in December 2020 from Bedell Cristin a year after moving in the other direction. Rounding off the cohort of new arrivals were Simon Hall and Sheba Raza, who joined the firm as counsel from Maples and Conyers respectively.

But the firm also saw a departure during the research period, as Jersey partner Jeremy Garrood left for JTC Law in October 2020.

Top cases of the research period

Carey Olsen’s London and BVI offices, including partner Richard Brown, represented the UK administrators of Blackbrook Asset Management, which incurred significant trading losses on short sales of US Treasury Bills in March 2020 and subsequently entered administration. The firm acted to recover sums from a BVI entity, on the basis of a common law indemnity arising as a result of Blackbrook’s position as its agent in entering the various trades. This resulted in a successful application to appoint liquidators in the BVI and a multi-million-dollar recovery for the creditors.

The firm also acted for the joint liquidators of Exential Investments, a BVI-denominated company that a Dubai court has found to be part of a Ponzi scheme centred on foreign exchange brokerage. It successfully obtained a sanction order in the BVI for a third-party funding facility to enable the liquidators to investigate and pursue cross-border asset tracing claims. The case marked the first time a BVI court has confirmed that the third-party funding of liquidations is lawful and permissible in appropriate circumstances. Hall Taylor and Brown were both part of the Carey Olsen team.

Carey Olsen continues to act as offshore counsel to PwC as Cayman court-appointed joint liquidators of UAE private equity firm Abraaj Holdings. The private equity firm entered into provisional liquidation after two creditors – a Kuwaiti pension fund and a US asset management firm – sought to wind it up on the back of investor accusations that the Abraaj Group had misused around US$200 million allocated to a healthcare fund it manages. Abraaj Holdings has since moved into official liquidation. Partners Peter Sherwood, Jan Golaszewski and Nick Bullmore have all worked on the case.

Elsewhere, Golaszewski is part of a team acting for an ad hoc group of bondholders in China’s Luckin Coffee in connection to its provisional liquidation and restructuring of its debt, which is to be implemented through a Cayman Islands scheme of arrangement. The bondholders represent over 80% of the value of the US$460 million of convertible bonds, the senior class of Luckin’s debt.

The firm also continues in its capacity as joint counsel to Alvarez & Marsal as the Guernsey-appointed liquidators of Joannou & Paraskevaides Overseas, a Cypriot construction company with operations in Europe and the Middle East. It is working alongside DLA Piper and Mayer Brown, with the total value of debt being restructured over US$1 billion. Partners David Jones and Tim Corfield are leading on that case.