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Trading in the twilight – a recent UK case may pose risks for Hong Kong company directors who “postpone the inevitable"

When a company is in financial distress, directors face difficult choices. Should they trade on to try to “trade out” of the company’s financial difficulties or should they file for insolvency? If they act too soon, will...more

9/24/2024  /  Board of Directors , Hong Kong , Insolvency , UK

No clear picture - Hong Kong court criticises legal representatives in refusing to sanction scheme of arrangement

A Hong Kong court has refused to sanction a scheme of arrangement, saying that practitioners should explain the key terms and effect of any proposed restructuring in a way which can be easily understood by the creditors and...more

Hong Kong Court of Appeal rules arbitration agreement trumps winding-up petition in insolvency

The Hong Kong Court of Appeal has finally laid to rest the vexed issue of whether an arbitration agreement or a winding-up petition should take precedence in an insolvency situation. In two parallel decisions, the Court of...more

Not set in stone – Hong Kong court approves post-implementation modifications to scheme of arrangement

The Hong Kong High Court has given a rare order for modifications to a scheme of arrangement after it had been implemented incorrectly by the scheme administrators. Drawing on instances in which the English courts have...more

Hong Kong and PRC Restructuring & Special Situations 2023 year in review - Key insolvency decisions in Hong Kong and the People’s...

The past twelve months have been a time of continuing significant developments in courtled corporate rescues in Hong Kong, all within the flexible confines of the common law and in the continued absence of a statutory...more

Arbitration agreements vs. winding up petitions – Hong Kong Court of Appeal to decide

On 25 October 2023, the Hong Kong Court of First Instance granted leave to appeal the decision in Shandong Chenming Paper Holdings Ltd [2023] HKCFI 2065 to dismiss a winding up petition in favour of arbitration. This opens...more

Do as you're told - Hong Kong court orders uncooperative former director to ratify liquidator appointment

The Hong Kong court has granted an order forcing an uncooperative former director of a Hong Kong listed company to ratify the appointment of a Hong Kong liquidator as the sole director of the companies' four BVI subsidiaries....more

10/25/2023  /  China , Hong Kong , Liquidation , Subsidiaries

Agree to disagree - does winding-up or arbitration take precedence in insolvency?

Three recent Hong Kong first instance court decisions have left undecided the question of whether a winding-up petition will trump an agreement to arbitrate when it comes to a winding-up and particularly in the context of...more

Not a leg to stand on - Hong Kong court blocks noteholder from presenting winding-up petition

The Hong Kong court has handed down a significant decision on the issue of whether an individual bondholder under a global note can present a winding up petition against a bond issuer. The court in Re Leading Holdings Group...more

Beyond the scope - recognition of mainland liquidation by Hong Kong court achieved through common law

In the case of Re Guangdong Overseas Construction Corporation [2023] HKCFI 1340, the Honourable Madam Justice Linda Chan recognized and provided assistance to a mainland China appointed administrator over a mainland China...more

Kept-well: Hong Kong court hands keepwell trustee significant win

A Hong Kong court has awarded a trustee enforcing obligations under a keepwell deed more than US$489 million after finding the keepwell provider to be in breach. The decision by the Honourable Mr Justice Harris in Citicorp...more

6/19/2023  /  Creditors , Hong Kong , Insolvency , Trustees

No concrete proposal - Hong Kong court calls for debtor companies to show realistic restructuring proposals

A Hong Kong court has reminded debtors of the need to present a credible and realistic restructuring proposal when facing creditors threatening winding up actions. In Re Jiayuan International Group Limited (佳源國際控股有限公司) [2023]...more

Hong Kong court rules keepwell deeds are enforceable in first of its kind decision

In the latest development regarding the validity and enforceability of keepwell deeds in the "Peking Founder” litigation, a Hong Kong court has awarded more than US$164 million by way of damages to one of the plaintiffs who...more

Petition barred - Hong Kong CFA confirms primacy of exclusive jurisdiction clause in bankruptcy

The Hong Kong Court of Final Appeal (CFA) has confirmed a Court of Appeal finding that the court should respect the effect of an exclusive jurisdiction clause in bankruptcy proceedings, just as it does in ordinary civil...more

Foreign exchange - Hong Kong court orders winding up of listco already wound up in Cayman Islands

In another blow to the concept of "soft touch" provisional liquidation, the Court of First Instance has granted an ancillary winding up order against a Hong Kong listed company that had already been wound up in its place of...more

Parallel lines – Hong Kong Airlines undergoes English and Hong Kong restructuring

Hong Kong’s last remaining independent airline carrier, Hong Kong Airlines Limited has undergone a significant debt restructuring. In parallel proceedings (a restructuring plan in the UK and a scheme of arrangement in Hong...more

Moving in unity – Hong Kong court does away with deed of contribution requirement in sanctioning guarantor's scheme

In Re Unity Group Holdings International Ltd [2022] HKCFI 3419, the Hong Kong court has for the first time sanctioned a scheme of arrangement that releases debts of third-party obligors that were guaranteed by the scheme...more

Restructuring & Special Situations 2022 Year in Review Key insolvency decisions in Hong Kong and the People’s Republic of China

2022 has been a year which has seen significant developments in court-led corporate rescue and insolvency law reform in Hong Kong. In light of the lingering COVID19 pandemic, it was all the more important that the Hong Kong...more

Cross-border enforcement of judgments in Hong Kong and the PRC – a new dawn? Talking Point Asia – November 2022

A wide-ranging mechanism allowing for reciprocal enforcement of judgments in mainland China and Hong Kong has come one stage closer with the gazetting on 4 November 2022 of the Mainland Judgments in Civil and Commercial...more

The carnival concludes – directors who opposed winding up ordered to pay costs

Directors who opposed a winding up action citing an unrealistic restructuring proposal have now been ordered to pay costs, after a swift follow-on decision by the Hong Kong Companies Court....more

Hong Kong Court of Appeal gives boost to bondholders in significant "keepwell" victory

The Hong Kong Court of Appeal has dismissed a challenge to a first instance decision which recognized the Beijing administrators of the commercial arm of the Peking University group but granted only a limited stay of...more

The carnival is over – directors face cost consequences of opposing winding up

Directors who oppose company windings up with little more than a hope that a restructuring proposal may bear fruit may have to weigh their actions carefully going forward, following a recent decision by the Hong Kong...more

Hong Kong court issues stunning criticism of provisional liquidators for abusing winding-up procedure

A Hong Kong court has severely criticised the provisional liquidators (PLs) appointed by the court in the company’s place of incorporation in the Cayman Islands, for trying to interfere with the rights of creditors in Hong...more

Hong Kong court gives creditors the nod to sue despite Chapter 15 scheme recognition

The Hong Kong court has sanctioned a scheme of arrangement for a Hong Kong-listed, Bermuda-incorporated fertilizer manufacturer based in the mainland. In doing so, the Honorable Mr Justice Harris also warned holders of U.S....more

Hong Kong court highlights COMI over place of incorporation when recognising foreign insolvency processes

The Hong Kong court has confirmed that – going forward – the court is ready to recognize and assist a foreign insolvency process conducted in the company’s center of main interests (COMI) and that it will no longer be...more

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