The Hong Kong Court has power pursuant to section 327 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) to wind up a foreign-incorporated company in Hong Kong. Before the Court can exercise its statutory jurisdiction, the following three well known “core requirements”, cited by the Court of Final Appeal in Kam Leung Siu Kwan v Kam Kwan Lai (2015) 18 HKCFAR 501, must be satisfied:

Since the signing of a record of meeting concerning mutual recognition of and assistance to insolvency proceedings between the courts of Mainland China and Hong Kong in May 2021, there have been a number applications for letters of request to be issued by the Hong Kong Court to the Bankruptcy Court of the Shenzhen Intermediate People’s Court.

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 Supreme Court in Sevilleja v Marex Financial Ltd [2020] UKSC 31 has brought much needed clarity to the legal basis and scope of the so-called ‘reflective loss’ principle. The effect of the decision is a ‘bright line’ rule that bars claims by shareholders for loss in value of their shares arising as a consequence of the company having suffered loss, in respect of which the company has a cause of action against the same wrong-doer.

A recent decision of the High Court of New Zealand provides helpful guidance for insolvency practitioners on how aspects of the voluntary administration regime should operate in the context of the COVID-19 pandemic.

On 30 March 2020, the board of directors of EncoreFX (NZ) Limited resolved to appoint administrators to the company. By then, New Zealand was already at Level 4 on the four-level alert system for COVID-19.

In recent years the Hong Kong Companies Court has dealt with a large number of applications for recognition and assistance from the Courts of various overseas jurisdictions in relation to cross border insolvency matters. The Court will now routinely grant orders of recognition and assistance to liquidators of companies incorporated in Commonwealth jurisdictions such as the Cayman Islands, Bermuda and the British Virgin Islands, which are all common law jurisdictions which have insolvency law regimes which are in many ways similar to Hong Kong’s own regime.

The UK Court of Appeal has held that legal privilege outlasts the dissolution of a company in Addlesee v Dentons Europe LLP [2019] EWCA Civ 1600.

Legal advice privilege applies to communications between a client and its lawyers. The general rule is that those communications cannot be disclosed to third parties unless and until the client waives the privilege.

The High Court in DHC Assets Ltd v Arnerich [2019] NZHC 1695 recently considered an application under s 301 of the Companies Act (the Act) seeking to recover $1,088,156 against the former director of a liquidated company (Vaco). The plaintiff had a construction contract with Vaco and said it had not been paid for all the work it performed under that contract.

Regan v Brougham [2019] NZCA 401 clarifies what is needed to establish a valid guarantee.

A Term Loan Agreement was entered into whereby Christine Regan and Mark Tuffin lent $50,000 to B & R Enterprises Ltd. Rachael Dey and Bryce Brougham were named as Guarantors. Bryce Brougham was the only guarantor to sign the agreement. The Company was put into liquidation and a demand made against the Guarantor.

The guarantor argued that the guarantee was not enforceable based on the following:

The Court of Appeal in 90 Nine Limited v Luxury Rentals NZ Limited [2019] NZCA 424 allowed an appeal from a creditor in respect of an application to liquidate the respondent over a failure to pay a statutory demand.