The Treasury has released a consultation paper on changes to improve creditors’ schemes of arrangement in Australia (the Consultation Paper).[1] The main proposal in the Consultation Paper is the consideration of a broad automatic moratorium, available to companies proposing a creditors’ schem
In the recent case of Re Hydrodec Group Plc [2021] NSWSC 755 (Hydrodec) the Supreme Court of New South Wales (NSW Supreme Court or Court) rejected an application by a non-operating holding company, Hydrodec Group Plc (the Company), for recognition of its United Kingdom (UK) debtor-in-possession Part A1 moratorium process (Part A1 Moratorium) and relief from a winding up application being made against the Company in Australia.
On 14 May 2021, Hong Kong’s Secretary for Justice and the Vice-President of the Supreme People’s Court (SPC) signed a record of meeting concerning mutual recognition of and assistance to insolvency proceedings between the courts of Mainland China and Hong Kong (Record of Meeting), which signifies the consensus on the mutual recognition of and assistance to insolvency proceedings between the two jurisdictions in accordance with the principle of reciprocity and with a view to promoting closer cross-border judicial cooperation on insolvency matters.
The recent Court of First Instance decision in Li Yiqing v Lamtex Holdings Limited [2021] HKCFI 622 (11 March 2021) is a landmark decision in cross-border insolvency law in Hong Kong, in which the Court held that when it is considering the recognition of foreign insolvency proceedings, regard should not simply be had to the place of incorporation of the relevant company, but that in a departure from previous practice, the location of the company’s centre of main interest (COMI) is also a factor.
At present, Hong Kong does not have any statutory corporate rescue regime. A financially distressed company may try to rescue its business by entering into (i) private debt restructuring agreement(s) with its major creditors; or (ii) a scheme of arrangement under the Companies Ordinance (Cap. 622), which allows for a compromise between the company and its shareholders and creditors.
Two recent decisions of the Honourable Mr Justice Harris are helpful additions to the growing amount of case law in this jurisdiction dealing with cross-border insolvency issues and are worthy of examination.
Hong Kong Companies Court appoints provisional liquidators for the purpose of seeking recognition in Mainland for the first time
The Australian chapter of GRR’s Asia-Pacific Restructuring Review 2021, authored by Herbert Smith Freehills, is now available and reproduced below.
This latest edition covers major Australian legislative developments, transactions and case law relating to restructuring and insolvency in Australia over the past 12 months including:
Legislation
- Temporary COVID-19 insolvency law amendments
- Anti-phoenixing amendments to the Corporations Act
Key restructurings
We are pleased to announce the publication of the third edition of the Herbert Smith Freehills Guide to Restructuring, Turnaround and Insolvency, Asia Pacific.
Against a backdrop of the COVID-19 pandemic and the resulting economic downturn, we are seeing companies and lenders respond to a new and challenging business environment. The challenges associated with this new environment are further exacerbated as the influencing factors change in nature and intensity.
The Australian Federal Government has announced significant insolvency law reforms that will affect small businesses with liabilities of less than $1 million. The reforms are expected to commence on 1 January 2021 and will introduce, among other measures, a new debt restructuring process and liquidation pathway for small businesses which the Government intends to be simpler, more flexible and more efficient than existing processes.
In brief
The Australian Federal Government has announced the temporary amendments to insolvency and corporations laws will be extended until 31 December 2020 in light of the continuing challenges of COVID-19.
In brief