In a recent landmark case, the Court of Final Appeal in Hong Kong (CFA) clarified its approach to bankruptcy proceedings where the disputed petition debt arises from a contract with an exclusive jurisdiction clause (EJC) favouring a foreign court.
Background
The bankruptcy proceedings related to a disputed debt due under a credit agreement with an EJC favouring New York. The Hong Kong Court of Appeal (CA) upheld the EJC, setting aside the bankruptcy order to allow the dispute to be determined under the agreed jurisdiction. The applicant appealed to the CFA.
Re Gatecoin Limited (Gatecoin) is a landmark decision concerning the winding-up of a cryptocurrency exchange.
Background
Liquidators secured over 50 types of cryptocurrencies with an aggregate value of over HK$140m. To aid the liquidator’s allocation of the seized cryptocurrencies, the Court of First Instance decided two key issues.
Decision
The court held that:
On 9 December 2022, in the first restructuring to be implemented by way of a parallel and overlapping Hong Kong scheme and English restructuring plan, the English High Court approved a restructuring plan proposed by Hong Kong Airlines Limited (Hong Kong Airlines). The High Court of Hong Kong followed suit on 14 December 2022 and approved a scheme of arrangement on broadly the same terms.
The approved restructuring has saved Hong Kong Airlines from imminent liquidation and aims to secure its continued existence as a going concern.
Background
On 18 January 2022, Hong Kong-listed cruise operator Genting Hong Kong Limited ('Genting HK') filed for provisional liquidation with the Supreme Court of Bermuda after it failed to secure access to liquidity. Genting HK has since gone into liquidation.
Background
Hong Kong courts recently recognised reorganisation proceedings in Mainland China for the first time in Re HNA Group Co Limited [2021] HKCFI 2897, further enhancing the cooperation between Mainland China and Hong Kong in cross-border insolvency matters.
The facts
In May 2021, a landmark co-operation mechanism was implemented between Hong Kong and Mainland China in cross-border insolvency matters.
Liquidators from Hong Kong can now apply to the courts in three Mainland "pilot cities" (ie Shanghai, Shenzhen and Xiamen) for recognition and assistance, provided that:
The Hong Kong government will introduce a long-awaited statutory corporate rescue procedure (CRP) in 2021, bringing the regime more in line with international practice in jurisdictions such as the UK and the USA.
The current lack of a CRP in Hong Kong means that there are limited options available to distressed companies and the lack of a moratorium on creditor enforcement jeopardises legitimate restructuring efforts. The Companies (Corporate Rescue) Bill is timely given the difficulties brought by the current economic downturn, itself exacerbated by the impact of COVID-19.
The Hong Kong government will introduce a long-awaited statutory corporate rescue procedure (CRP) in 2021, bringing the regime more in line with international practice in jurisdictions such as the UK and the USA.
The current lack of a CRP in Hong Kong means that there are limited options available to distressed companies and the lack of a moratorium on creditor enforcement jeopardises legitimate restructuring efforts. The Companies (Corporate Rescue) Bill is timely given the difficulties brought by the current economic downturn, itself exacerbated by the impact of COVID-19.
Re Gatecoin Limited (Gatecoin) is a landmark decision concerning the winding-up of a cryptocurrency exchange.
Background
Liquidators secured over 50 types of cryptocurrencies with an aggregate value of over HK$140m. To aid the liquidator’s allocation of the seized cryptocurrencies, the Court of First Instance decided two key issues.
Decision
The court held that:
On 9 December 2022, in the first restructuring to be implemented by way of a parallel and overlapping Hong Kong scheme and English restructuring plan, the English High Court approved a restructuring plan proposed by Hong Kong Airlines Limited (Hong Kong Airlines). The High Court of Hong Kong followed suit on 14 December 2022 and approved a scheme of arrangement on broadly the same terms.
The approved restructuring has saved Hong Kong Airlines from imminent liquidation and aims to secure its continued existence as a going concern.
Background