Protected Cell Companies
A Guide to Their Implementation and Use
Häftad, Engelska, 2010
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This Second Edition of Protected Cell Companies is a valuable resource for practitioners who work with this important new business form. The Protected Cell Companies Act was first introduced in Guernsey in 1997 and other jurisdictions have followed this path. This gave rise to the First Edition of this book which contained the legal analysis essential to further use and development. The book provides comprehensive guidance on such complex issues as insolvency, veil-piercing, tax, and accounting. As lawyers and business people have come to understand the PCC its uses have spread from its origins in captive insurance companies to providing a bankruptcy remote vehicle for special purpose vehicles, credit derivatives, and open-end investment companies. The authors show that PCCs are now widely used by insurers, insurance brokers, banks, investment and fund managers and international tax planning advisers. They also describe the use of PCCs and related devices not only in their originating jurisdictions but in the EU, the US and around the world.This new edition contains substantial additions but with the same practical emphasis of the original book.
Produktinformation
- Utgivningsdatum2010-03-25
- Mått156 x 234 x 30 mm
- Vikt975 g
- FormatHäftad
- SpråkEngelska
- Antal sidor574
- Upplaga2
- FörlagSpiramus Press
- ISBN9781904905929
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Nigel Feetham is a partner at Hassans International Law Firm. His area of practice includes insurance, funds and structured finance. He has played a major part in some of the most significant developments in the Gibraltar finance sector. Grant Jones is an insolvency accountant partner with Cooper Parry LLP. He also practises as an attorney, in-house with a UK hedge fund and as a consultant to the UK firm of Taylor Vinters and the Gibraltar firm of Ellul & Co, as well as having his own arbitration practice. He is a member of the Governing Council of the ICAEW, President of the London Society of Chartered Accountants and a Special Professor of Law at Nottingham University.
- Acknowledgments vAbout the Authors viPreface to the Second Edition. viiForeword to the Second Edition. xiForeword to the First Edition. xvContents.. xixTables of Authorities xxviiiIntroduction.. 11. RING FENCING AND THE EVOLUTION OF THE CELL COMPANY 31.1.... The Cell Captive. 61.2.... The Cell Captive structure: how does it work?. 71.3.... Claims Limitation. 91.4.... Unfair Contract Terms Directive. 101.5.... Why the need for the protected cell?. 131.6.... Repackaging. 171.6.1..... What is a repackaging?. 181.6.2..... Asset Swap.. 181.6.3..... The Special Purpose Vehicle. 191.6.4..... Credit-linked Notes. 201.7.... Funds. 232. THE ADVENT OF THE PCC. 292.1.... The Challenge. 312.2.... Substantive versus procedural 332.3.... Location of assets, custodian and Collateral Directive. 372.4.... Beware of claims that may not be limited! Especially involuntary creditors 392.5.... Provisions of Gibraltar (and Guernsey) PCC legislation. 402.5.1..... Requirements on incorporation/conversion.. 402.5.2..... Duty to inform third parties. 412.5.3..... Separation of assets. 412.5.4..... Share capital 432.5.5..... Administration.. 432.5.6..... Cells are not legal entities. 452.6.... Entrenchment 452.7.... Market acceptance and respecting the intention of the parties. 463. SERIES LLC: AN ANALOGOUS BUSINESS FORM TO THE PCC. 493.1.... Delaware. 493.2.... US Case-law.. 573.3.... SEC Prouncement 613.4.... Statutory segregation under Italian law.. 633.4.1..... “Allocation of dedicated assets to specified business activities” 663.4.2..... “Financing allocated to a specific business activity”. 674. THE INSURANCE COMPANY PCC: WITH A FOCUS ON THE EU.. 694.1.... What is a captive?. 704.2.... Application of the PCC concept 714.3.... Lloyd’s of London and the PCC. 744.4.... Fronting versus Risk Bearing Cell 774.5.... Future developments. 804.6.... Solvency II 824.7.... Summary. 844.8.... Documentation. 845. MANAGING A PCC CAPTIVE. 855.1.... Regulatory. 895.2.... Branch or Services?. 915.3.... Will the intermediary/service provider be subject to the direction and control of the Insurer? 925.4.... Is the intermediary able to commit the Insurer?. 925.5.... Has the intermediary received a permanent brief from the Insurer? 935.6.... Freedom of Services. 935.7.... Governing law and jurisdiction clauses. 955.8.... Should the PCC structure be offensive to a regulator?. 1005.9.... Who should perform the compliance function?. 1015.10.. Cell Management Contract 1015.11.. Directors’ Duties. 1025.12.. Checklist of Dos and Don’ts. 1036. GROWING MARKET FOR THE PCC. 1056.1.... The PCC and the Investment Fund. 1056.2.... The PCC in the world of Structured Finance. 1136.3.... Portfolio transfers and the potential use of the PCC. 1156.4.... Is the use of the PCC a possible solution for the UK pensions problem? 1166.5.... Shariah law and the PCC. 1176.6.... The PCC Life Company. 1186.7.... The Credit Crunch and Madoff 1216.8.... Could a PCC redomicile between jurisdictions or amalgamate? 1236.8.1..... Why should a PCC be objectionable to a foreign jurisdiction? 1287. BASIC INSOLVENCY PRINCIPLES RELEVANT TO PCCs. 1337.1.... Pari Passu. 1337.1.1..... Pari Passu and PCCs internationally. 1337.2.... Hotch pot 1347.3.... ‘Pro-Creditor’ v ‘Pro-Debtor’ 1347.4.... The Insolvency Practitioner 1367.5.... Internationalism v Nationalism.. 1367.6.... Seat Theory v Centre of Main Interest (COMI) 1377.6.1..... Rescue Culture. 1387.6.2..... Transnational and International Insolvency Regimes. 1397.6.3..... Preferential or priority creditors and involuntary creditors. 1407.6.4..... Secured or in rem creditors. 1427.6.5..... Antecedent transactions or detrimental acts. 1438. EU REGIMES: AN INTRODUCTION.. 1458.1.... Background. 1458.2.... Relevant EU Directives and Regulations; an introduction. 1469. THE EU REGULATION: AN OVERVIEW.. 1499.1.... The EU Regulation: a detailed analysis of its PCC relevant provisions 1499.1.1..... Introduction.. 1499.1.2..... Article 1. Ambit 1499.1.3..... The initial question.. 1499.1.4..... Article 3 - international jurisdiction - the centre of main interest or COMI. 1539.1.5..... Article 4 - law applicable - Renvoi 1559.1.6..... Article 5 - third parties rights in rem, i.e. secured rights of third parties. 1569.1.7..... Article 6 - set-off 1599.1.8..... Article 11 - effects on rights subject to registration.. 1609.1.9..... Article 13 - detrimental acts (or “antecedent transactions”) 1609.1.10... Article 20 - return and imputation - “the hotch pot rule”. 1619.1.11... Article 26 - public policy. 1629.1.12... Article 32 - exercise of creditor rights. 1639.1.13... National exceptions within the EU.. 1649.2.... Part 1 of the Gibraltar PCC Act of the EU.. 1689.2.1..... Section 3 - PCC “Formation and Attributes”. 1689.2.2..... Section 6 – “the position of creditors”. 1689.2.3..... Section 8 – “Cell shares and share capital”. 1719.2.4..... Section 13 – “Liability of cellular assets”. 1719.2.5..... Section 15 – “Company to inform persons they are dealing with... [PCC]” 1719.3.... Parts II (sections 19-23) and III (sections 24-28) - Receivership and Administration Orders 1729.3.1..... Introduction.. 1729.3.2..... The three insolvency processes under the Gibraltar PCC Act 1729.3.3..... Gibraltar and its relationship to the UK re the EU Insolvency Regulation 1739.3.4..... The Gibraltar liquidator process. 1749.3.5..... The Gibraltar receiver process. 1769.3.6..... The Gibraltar administrator process. 1779.4.... THE EU Insurance Insolvency Directive. 1789.4.1..... Background.. 1789.4.2..... The EU Insurance Insolvency Directive and its Recital: its general aims, purpose and ambit 1809.5.... The EU Insolvency Insurance Directive: Articles. 1829.5.1..... Article 1. 1829.5.2..... Article 2 - definitions. 1839.5.3..... Article 4. 1849.5.4..... Article 9. 1849.5.5..... Article 10. 1849.5.6..... Articles 19-26: provisions common to reorganisation measures and winding-up proceedings 1859.5.7..... Article 27 - Administrators and liquidators. 1859.5.8..... Article 30 – “Branches of third country insurance undertakings” 1869.6.... The EU Insurance Regulation and the UK.. 18610. UNCITRAL MODEL LAW.. 19110.1.. Background. 19110.2.. The Title – “Model Law”, etc. 19310.3.. Article 1 of the Model Law – Scope of Application. 19310.4.. Article 2 – “Definitions”. 19410.4.1... Proceedings. 19410.4.2... Debtor. 19610.5.. Article 5 – Foreign Representative. 19810.6.. Article 6 – Public Policy Exception. 19810.7.. Articles 11 and 12 – Foreign Representatives and Proceedings 19810.8.. Article 13 – Creditor Discrimination. 19810.9.. Article 16 – Presumptions Concerning Recognition. 19910.10 Article 17 – Recognition and Relief Re Foreign Proceedings. 20910.11 Articles 21 and 22 – relief granted and creditor protection. 21010.12 Articles 25 and 27 – Cooperation and Direct Communication. 21510.13 Article 32 – “Hotch pot”. 21511. THE COMMONWEALTH INSOLVENCY REGIME AND OTHER UK MATTERS 21711.1.. Section 426 of the Insolvency Act 1986. 21711.1.1... Section 426: an introduction.. 21711.1.2... What Commonwealth Jurisdictions are covered by Section 426 and have PCC legislation? 21711.1.3... Interaction between Section 426, and the Model Law and the EU Regulation 21911.1.4... What is the “insolvency law” within section 426. 22011.1.5... Court Cooperation.. 22011.1.6... Given a section 426 application by a PCC IP from a Designated Territory, how could a UK court react? 22011.1.7... Schemes of Arrangement: Section 427 and alternative statutory approach to pari passu 22411.1.8... Concluding thoughts. 22611.2.. Part V of the UK Insolvency Act 1986 (""Part V"") 22711.2.1... Introduction.. 22711.2.2... Part V grounds to “wind up”. 22811.3.. Part V and limited liability. 22911.3.1... PCC jurisdictions and their claims to extraterritoriality. 22911.3.2... UK Company Directors Disqualification Act 1986 (“CDDA”) and Similar Provisions 23112. DIRECTOR LIABILITY and PCC INSOLVENCIES. 23312.1.. Director liability – notification and segregation liabilities. 23312.1.1... Introduction.. 23312.1.2... Notification liability. 23312.2.. Segregation liability - background. 23712.2.1... Segregation Duties: Directors and IPs: a Case of Conflict of Interest 24012.2.2... Non-Recognition Liability. 24212.2.3... What Constitutes a Director?. 24412.2.4... What constitutes a Shadow Director?. 24712.2.5... What constitutes behaviour serious to warrant CDDA Prosecution? 24812.2.6... Corporate directors. 24913. PIERCING THE CORPORATE VEIL. 25113.1.. Introduction. 25113.2.. Insurance and third parties. 25313.2.1... Sham: generally. 25513.2.2... US Shams: an introduction.. 25513.3.. Cell migration. 25613.4.. International factors influencing ‘piercing the corporate veil’. 26013.4.1... Groups. 26113.4.2... Alter-ego. 26213.4.3... Involuntary versus voluntary creditors. 26213.4.4... Under-capitalisation.. 26313.5.. Financial centres and/or OFCs. 26313.6.. PCC conversion. 26413.7.. Minimising measures. 26413.8.. Antecedent transactions and detrimental acts. 26514. PCC CELLS: AN ASSET IN AN INSOLVENCY?. 26914.1.. The PCC as an Asset Protection Trust (APT) and “Antecedent Transactions” generally: The non-traditional uses of PCCs. 26914.2.. Comparative PCC insolvency priorities. 27214.2.1... Introduction.. 27214.2.2... Different priorities. 27314.2.3... The Jersey Difference. 27714.2.4... The US Difference. 27914.2.5... The Bermudan Difference. 28014.2.6... Preferential Liabilities and PCCs. 28014.2.7... Shareholder Liabilities. 28114.3.. Expenses in a PCC insolvency. 28114.3.1... IP expenses and priority allocation in a PCC or PCC cellular insolvency 28114.3.2... The Messenger Insolvency. 28214.3.3... How do PCC regimes address IP costs?. 28314.3.4... Proprietary claims versus IP fees. 28414.3.5... If PCC statues address IP fees, how do they do it?. 28414.4.. Cellular structures and in rem or secured rights. 28614.4.1... Proprietary Claims – the issue of subordination.. 28614.4.2... Conflict of law: substance and procedure. 28614.4.3... In rem v in personam liability. 28814.5.. A consideration of UK cases and pari passu. 28915. TAX TREATMENT OF A PCC. 29315.1.. Tax creditors. 29315.2.. Local v Foreign; State v Federal tax Treatment of a PCC. 29315.3.. International Taxation and the PCC. 29715.4.. Tax issues Regarding a Cell Captive. 30715.5.. Concluding remarks. 30816. WHAT ARE THE GROUP ACCOUNTING ISSUES?. 30916.1.. Group protected cell companies - accounting considerations under International Financial Reporting Standards 30916.2.. Group consolidation considerations. 31016.2.1... Group general considerations. 31016.2.2... Group special purpose entities. 31116.2.3... Group summary. 31317. WHAT ARE THE PCC and CELLULAR ACCOUNTING ISSUES?. 31517.1.. Article 127 YE - Annual return in respect of cells. 31517.2.. Article 127YF of the Law is repealed. 31517.3.. Article 127YG Accounts of cell companies. 31518. CONCLUSIONS. 31718.1.. Insolvency conclusions. 31718.2.. General Conclusion and Summary. 319Appendix 1: Specimen Articles and Memorandum for an insurance PCC 321Appendix 2: Specimen Articles of Contractual Cell Company 367Appendix 3: Specimen Memorandum and Articles of Association of a PCC Umbrella Fund 405Appendix 4: Specimen Private Information Memorandum of a PCC Umbrella Fund 461Appendix 5: The Reinsurance Assignment Agreement. 523