Directors who oppose the winding-up of an insolvent company in the hope that a restructuring proposal would come to fruition should tread carefully and consider seriously whether to put the company into liquidation.

Judicial comments cast doubt on the ability to compromise US law-governed debt effectively based on Chapter 15 recognition alone.

The Hong Kong Court of Appeal has confirmed that the court should respect the effect of an exclusive jurisdiction clause in bankruptcy proceedings, just as it does in ordinary civil actions. To do otherwise, it said, it would be illogical.

As the tile suggests the state of recognition and assistance jurisprudence & practice in Hong Kong is less than clear. This follows the recent (mostly) conflicting 1st instance decisions of Up Energy and Global Brands. Here are my views about (i) what I believe is settled; (ii) the points of judicial difference; and (iii) what remains unclear.

Settled

This is an important update in the Australian corporate and insolvency law context because, in BTI 2014 LLC v Sequana SA and others [2022] UKSC 25, the UK Supreme Court (being the UK’s highest court) confirmed the existence of a duty owed by directors to creditors in certain circumstances (creditor duty). Under the common law and equity (together, general law), there is a gateway to applicability of the creditor duty in Australia.

引言

英国终审法院最近就 BTI 2014 LLC 诉 Sequana SA 及其他 [2022 UKSC 25] 一案（“Sequana 案”）颁布一份万众期待的判决。Sequana 案的法理将于开曼群岛以至其他普通法司法管辖权区成为极具说服力的法律根据。

Sequana 案是一项有用的判决，原因如下：

• 该案不但确认董事对股东负有受信责任而须真诚以公司最佳利益行事的传统观点，同时指出董事于公司无力偿债或濒临无力偿债或可能进行无力偿债清盘或管理时，须考虑债权人利益或以其行事（“债权人利益责任”）。
• Sequana 为英国终审法院审理的首宗案件裁定董事于哪些情况下必须考虑公司债权人利益，不论债权人利益责任可否于公司无力偿债前触发，以及股东可否认可对债权人利益责任的潜在违反。

背景

In this Article, José-Antonio Maurellet SC (a member of DVC and an Associate Member of 3 Verulam Buildings) and Michael Lok discuss the landmark decision just handed down by the Supreme Court of the United Kingdom in BTI 2014 LLC v Sequana SA and others 

Where a company's liquidation is necessary, deciding who or where is best placed to administer an orderly wind down for the benefit of creditors can be difficult: the shortfall of assets in an insolvency will highlight jurisdictional differences in approach as to questions of priority, frequently territorial rather than universalist.

Robert Chan, instructed by Leon Lai & Co, represented D2-Leung Yung (“Leung”), the former Chief Executive Officer of Peace Mark (Holdings) Ltd, to resist the Plaintiffs’ application to amend their claim to include a plea of wilful default or wilful negligence.

Key Points

Hong Kong Airlines (HKA) has announced that it is seeking to implement a restructuring of its aircraft lease obligations and other liabilities by court action in the UK and Hong Kong.

The plan proposes to give aircraft lessors a right to an upfront cash recovery — of about 5 percent of their claims (or in the case of lessors of aircraft being retained, the right to elect equity in the restructured HKA) — and potential future payouts starting in 2028 tied to the future earnings of the airline.