Can a Cayman creditor force my company into liquidation if we miss one loan payment?

In the Cayman Islands a creditor who is concerned that a borrower may miss a loan instal­ment can first seek a court‑ordered provisional liquidation. By filing a winding‑up petition the creditor triggers the appointment of a provisional liquidator, whose role is to preserve the company’s assets and to keep the business from dissipating . The provisional liquidator’s powers include an automatic stay on most creditor actions (except criminal proceedings) until the court decides whether to confirm a winding‑up order or to discharge the appointment .

Before a winding‑up petition is filed, the parties can often avoid liquidation by using the new Restructuring Officer (RO) regime introduced by the Companies Amendment Act 2021. Either the directors or a creditor may apply to the court for the appointment of a restructuring officer when the company is unable—or likely to become unable–to pay its debts. Once the petition for an RO is filed, a statutory moratorium automatically comes into force, halting creditor actions and giving the company breathing‑space to negotiate a compromise or scheme of arrangement with its lenders . This mechanism provides a practical avenue for you to negotiate a restructuring of the loan terms before any winding‑up petition is required.