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.
Statutory demand is a common and important tool in the winding up process. But recently, the Hong Kong Court of First Instance has reminded us that it is by no means a must.
1. Introduction
The long-running saga between Shandong Chenming Paper Holdings (“Shandong Chenming“) and Arjowiggins HKK2 Ltd (“Arjowiggins“) has continued with the Court of Appeal handing down its judgment on an appeal against a lower court judgment which had dismissed Shandong Chenming’s application to injunct Arjowiggins from presenting a winding-up petition against Shandong Chenming (Shandong Chenming Paper Holdings Limited v. Arjowiggins HKK2 Limited [2020] HKCA 670).
The Corporate Insolvency and Governance (CIG) Act 2020, which was enacted on 25 June 2020, introduces a number of permanent changes to the insolvency and restructuring framework in the United Kingdom, some of which have specific ramifications for the aviation sector. Crucially, the moratorium provisions in the CIG Act do not displace the protections afforded to creditors who have registered their interests under the Cape Town Convention.
Corporate Insolvency and Governance Act: Key Features
Three key features of the CIG Act 2020 are:
The UK Corporate Insolvency and Governance Bill, currently progressing through UK Parliament, will have an impact on various stakeholders in the aviation industry once enacted, due to its moratorium, supply contract, and restructuring plan provisions.
Key Features
The UK Corporate Insolvency and Governance Bill has three key features:
The recent decision in Re The Liquidator of Shenzhen Everich Supply Chain Co, Ltd (in liquidation in the People’s Republic of China) [2020] HKCFI 965 reaffirms the willingness of the Hong Kong Companies Court (the “Companies Court”) to recognise the winding-up of a company in Mainland China and thereby grant recognition and assistance to liquidators appointed in the Mainland.
In The Joint and Several Provisional Liquidators of China Oil Gangran Energy Group Holdings Limited [2020] HKCFI 825, the Hong Kong Court continued a trend of recognising foreign soft-touch provisional liquidators.
The UK government on 20 May set out its hotly anticipated Corporate Insolvency and Governance Bill, which, once enacted, will bring into force previously announced insolvency reforms.
We summarise below the main provisions of the bill as it currently stands. Please look out for further LawFlashes on this legislation as it develops over the next few weeks.
Moratorium