In brief
On 29 February 2024, the court of appeal will hear an appeal against an order for the insolvent liquidation of a company that unsuccessfully argued, at first instance, that the petitioning debt was subject to a dispute covered by contractual agreements to arbitrate. While the interplay between insolvency and arbitration is not a new issue, the upcoming hearing will be the first time after the court of final appeal's decision in Re Guy Kwok-Hung Lam [2023] HKCFA 9 ("Guy Lam") for the court of appeal to clarify the principles.
On 27 May 2022, the Honorable Mr. Justice Harris sanctioned a scheme of arrangement introduced by Rare Earth Magnesium Technology Group Holdings Limited, which was incorporated in Bermuda, to restructure its debt. The Reasons for Decision handed down on 6 June 2022 contain detailed discussions on, among other things, the use of schemes in cross-border insolvencies.
In brief
On 6 May 2022, the Honorable Madam Justice Linda Chan granted a petition for the winding-up (in Hong Kong) of Up Energy Development Group Limited, which was incorporated in Bermuda.
In brief
On 14 May 2021, the Supreme People’s Court (SPC) and the Hong Kong government agreed a framework (“Framework”) for judicial cooperation in corporate insolvency and debt restructuring. Under the Framework:
In brief
On 14 May 2021, the Supreme People’s Court (SPC) and the Hong Kong government agreed a framework (“Framework”) for judicial cooperation in corporate insolvency and debt restructuring. Under the Framework:
The Commodity Futures Trading Commission proposed its first comprehensive overhaul of its bankruptcy rules since 1983. The recommended new rules do not substantively change anything but codify many CFTC interpretations and views developed over 40 years and refresh references to means of communication and recordkeeping practices to reflect current norms.
The infamous history of MF Global is closer to ending after the administrator for the bankrupt holding company filed a proposed notice of settlement that, if approved, would provide a payment of US $132 million to resolve most outstanding litigation against the company and individual former officers by certain customers and other creditors. The funds would come from insurance proceeds from policies maintained on behalf of the former officers of MF Global that were named as defendants in the litigation, including John Corizine, former chief executive officer.
The Board of Governors of the Federal Reserve System proposed a rule that would require US global systemically important banking institutions to amend their contracts for certain common financial transactions to preclude the immediate termination of such contracts if a firm enters bankruptcy or a resolution process. Relevant contracts – termed “qualified financial contracts” – that would have to be amended include those used for derivatives, securities lending and short time financing such as repurchase agreements.
A federal appeals court in Illinois held that Bank of New York Mellon Corporation and Bank of New York (collectively, “BNYM”) were on “inquiry notice” that Sentinel Management Group, Inc. improperly used customer funds as collateral for a loan prior to the firm’s collapse in August 2007. (Sentinel was an investment management firm registered with the Commodity Futures Trading Commission as a futures commission merchant that claimed it specialized in short-term cash management for hedge funds, individuals, financial institutions and other FCMs.
Twenty-one major global banks have already signed a relaunched stay protocol developed by the International Swap Dealers Association and other leading industry organizations in coordination with the Financial Stability Board. The purpose of the protocol is to help ensure the orderly resolution of a troubled bank by having firms voluntarily agree to abide by foreign resolution regimes in connection with cross-border transactions. A prior protocol was signed by 18 major banks in November 2014. The relaunched protocol increases the types of covered financial contracts.