Initial arrangements have been put in place for mutual recognition and assistance to be provided by courts in Mainland China and Hong Kong in respect of corporate insolvency proceedings. This is a significant and long awaited development which could substantially enhance the ability for cross border insolvencies and restructurings to be administered and implemented across the two jurisdictions.
On 14 May 2021, the Vice-President of the Supreme People’s Court of the PRC and the Hong Kong Secretary for Justice signed a brief Record of Meeting, setting out a consensus on the mutual recognition of and assistance to insolvency proceedings between the Mainland China and Hong Kong.
A recent pair of decisions of the Hong Kong Companies Court (the “Court”) has immense potential significance for debtor companies listed on the Stock Exchange of Hong Kong (“HKEx”) and their Hong Kong creditors.
Facts
Re Lamtex Holdings Ltd [2021] HKCFI 622 and Re Ping An Securities Group (Holdings) Ltd [2021] HKCFI 651 both involved a familiar factual scenario:
The real lesson from Debut Homes – don't stiff the tax (wo)man
The Supreme Court has overturned the 2019 Court of Appeal decision Cooper v Debut Homes Limited (in liquidation) [2019] NZCA 39 and restored the orders made by the earlier High Court decision, reminding directors that the broad duties under the Companies Act require consideration of the interests of all creditors, and not just a select group. This is the first time New Zealand’s highest court has considered sections 131, 135 and 136 of the Companies Act, making this a significant decision.
The natural and most appropriate jurisdiction in which to wind up a company is its place of incorporation. The Hong Kong Companies Court, however, routinely deals with winding up petitions against companies which are incorporated outside Hong Kong, but listed on the Hong Kong Stock Exchange (“HKEx”). Given recent economic difficulties, the number of such petitions has been on the rise.
Five years after it refused to pay rent and took the landlord to the High Court, and two years after it was placed into liquidation on account of unpaid rent, the final branch of litigation brought by the directors of Oceanic Palms Limited (in liq) has been cut down by the Supreme Court.
The UK Supreme Court in Bresco Electrical Services Ltd (in liq) v Michael J Lonsdale (Electrical Ltd) [2020] UKSC 25 has decided that the adjudication regime for building disputes is not incompatible with the insolvency process.
In the two judgments, Commissioner of Inland Revenue v Salus Safety Equipment Ltd (in liq) [2020] NZHC 1368 and Commissioner Inland Revenue v Green Securities Ltd (in liq) [2020] NZHC 1371, Associate Judge Bell significantly reduced the amount recoverable in each proceeding by liquidators.
Both cases considered applications from liquidators to seek approval of their remuneration. In Salus the amount claimed was $91,600 and in Green Securities it was $159,044.
Former liquidator Geoffrey Smith has been convicted on six charges, including stealing $130,000 from two companies to which he had been appointed liquidator. Mr Smith was also convicted of perjury in connection with the same liquidations.
The High Court judgment in Commissioner of Inland Revenue v Livingspace Properties Ltd (in rec and in liq) [2020] NZHC 1434 is another chapter in the continuing, bitter saga between Robert Walker, the liquidator of Livingspace and David Henderson (through his wife as proxy).