In recent years, it has become increasingly common for companies seeking to avoid an immediate winding-up order, particularly listed companies, to pray in aid of alleged efforts to restructure their debts in a bid to obtain adjournments of a winding-up petition. All too often, these valiant attempts fail: see Re Chase On Development Limited [2020] HKCFI 629, Re SMI Holdings Group Limited [2020] HKCFI 824 and Re REXLot Holdings Ltd [2020] HKCFI 2212 to name a few.

In recent years, it has become increasingly common for companies seeking to avoid an immediate winding-up order, particularly listed companies, to pray in aid of alleged efforts to restructure its debts in a bid to obtain adjournments of a winding up petition.

Yesterday, the United States Supreme Court, in Merit Management Group, LP v. FTI Consulting, Inc., Case No. 16-784, ruled that the “securities safe harbor” under section 546(e) of the Bankruptcy Code, 11 U.S.C. §§ 101-1532, does not shield transferees from liability simply because a particular transaction was routed through a financial intermediary—so-called “conduit transactions.”