The Grand Court of the Cayman Islands has found two directors of a failed investment fund liable in damages for the fund's losses caused by their breaches of duty. The judgment contains important commentary on directors' practices and procedures, although the implications for well-advised funds with competent and diligent directors are limited and the judgment is subject to appeal. However, all directors should revisit their practices to ensure they remain consistent with key corporate governance principles. This chapter examines the Weavering case and directors' duties, the court's findings on directors' duties, and guidance for directors of Cayman Islands investment funds.

This article is part of the PLC multi-jurisdictional guide to investment funds. For a full list of jurisdictional Q&As visit www.practicallaw.com/investmentfunds-mjg.