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Hong Kong Court of Final Appeal clarifies the law in respect of shareholders’ petitions to wind up foreign companies on just and equitable grounds

In its landmark decision of Kam Leung Sui Kwan v Kam Kwan Lai & Ors FACV 4/2015, issued yesterday, the Court of Final Appeal has brought some closure to the long running Yung Kee restaurant matter by making a winding up order against Yung Kee Holdings Limited (YKHL) with a 28-day stay to allow the parties to consider possible buy-out opportunities.  This reverses the previous decisions in the Court of First Instance and the

Hong Kong, Insolvency & Restructuring, Litigation, Herbert Smith Freehills LLP, Shareholder, Liquidation, Court of Final Appeal (Hong Kong)
Hong Kong court considers commercial character of funder in context of assessing commercial funding arrangements for companies in liquidation

The case of Re Company A-E [2015] HCMP 2019/2015 demonstrates that the Court will take a practical approach in determining whether a funding arrangement infringes upon the common law rules against maintenance and champerty. The Court will consider commercial factors, such as the underlying rationale for the funding arrangement and the commercial character of the funder, alongside its analysis of the common law principles.

Hong Kong, Insolvency & Restructuring, Litigation, Herbert Smith Freehills LLP, Common law
The chronicles of Insigma: the latest installment

Alstom v Insigma, the (in)famous SIAC arbitration administered under ICC rules, was recently up for yet another round of judicial sparring following years of proceedings in several fora, which left Alstom Technology Limited (“Alstom”) with a HK$261 million award but limited assets against which to execute.

Hong Kong, Arbitration & ADR, Insolvency & Restructuring, Litigation, Herbert Smith Freehills LLP, Alstom
Court of Appeal holds that anti-deprivation principle does not apply to provisions relating to the termination of an IP licence on insolvency

The anti-deprivation principle provides that “there cannot be a valid contract that a man’s property shall remain his until his bankruptcy, and, on the happening of that event, go over to someone else, and be taken away from his creditors”.

United Kingdom, Insolvency & Restructuring, Intellectual Property, Litigation, Herbert Smith Freehills LLP, Share (finance), Bankruptcy, Breach of contract, Interest, Joint venture, Court of Appeal of England & Wales
Court of Appeal reverses earlier decision and holds that anti-deprivation principle does not apply to provisions relating to the termination of an IP licence on insolvency

In September 2009 we reported on the first instance decision in Butters and ors v BBC Worldwide Ltd and ors, accessible here in which the Court held that contractual provisions in a joint venture agreement taken together with termination provisions in a licence of IP rights were void since the effect of those provisions on insolvency was to deprive creditors' access to assets and therefore contrary

United Kingdom, Insolvency & Restructuring, Intellectual Property, Litigation, Media & Entertainment, Herbert Smith Freehills LLP, Share (finance), Joint venture, Subsidiary, Court of Appeal of England & Wales
IP licences and insolvency - deprivation principle held to apply to provisions relating to the termination of an IP licence on insolvency

In Butters and ors v BBC Worldwide Ltd and ors, decided on 20 August 2009, the Court held that contractual provisions in a joint venture agreement taken together with termination provisions in a licence of IP rights were void since the effect of those provisions on insolvency was to deprive creditors access to assets and therefore contrary to public policy in the light of insolvency laws.

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United Kingdom, Insolvency & Restructuring, Intellectual Property, Litigation, Herbert Smith Freehills LLP, Share (finance), Bankruptcy, Joint venture, Public limited company, Prejudice, Subsidiary