The Hong Kong court has sanctioned a scheme of arrangement for a Hong Kong-listed, Bermuda-incorporated fertilizer manufacturer based in the mainland. In doing so, the Honorable Mr Justice Harris also warned holders of U.S. denominated debt that where they use offshore schemes of arrangement, they run the risk of individual creditors presenting winding-up petitions in Hong Kong. The view has however been queried in recent U.S. authority.

The Court of First Instance held in Re Up Energy Development Group Limited [2022] HKCFI 1329 that where the three core requirements for winding-up a foreign company under section 327(1) of the Companies (Winding up and Miscellaneous Provisions) Ordinance (Cap. 32) (CWUMPO) are satisfied, the mere fact that the foreign company has been ordered to be wound up by the court in its place of incorporation is not a ground for the Hong Kong court to decline the making of a winding up order.

A former listco

In Shandong Chenming Paper Holdings Limited v Arjowiggins HKK2 Limited [2022] HKCFA 11, the Court of Final Appeal has confirmed that the "leverage" created by the prospect of a winding-up – as opposed to the making of a winding-up order – provides a legitimate form of "benefit" for the purposes of satisfying the second of the three "core requirements" for winding up a foreign incorporated company in Hong Kong.

In a significant decision, the Shenzhen Intermediate People's Court (Shenzhen court) has ordered formal recognition in the mainland for Hong Kong appointed liquidators. This is the first occasion on which a mainland court has formally recognized and granted assistance to Hong Kong liquidators, expressly granting them powers to deal with assets located in the mainland under the new insolvency co-operation mechanism concluded between Hong Kong and the mainland.

随着香港及内地就相互认可和协助破产程序及重组事务达成共识，一个新纪元到来了。从今往后，希望通过中国债务人位于香港的财产收回欠款的债权人，或是拥有内地财产的香港运营实体的债权人，终于在谈判桌前享有了话语权。

随着香港及内地就相互认可和协助破产程序及重组事务达成共识，一个新纪元到来了。从今往后，希望通过中国债务人位于香港的财产收回欠款的债权人，或是拥有内地财产的香港运营实体的债权人，终于在谈判桌前享有了话语权。

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Tightening trade restrictions and concerns swirling around intellectual property rights are creating new risks for conglomerates faced with financial stress, especially when it comes to selling their assets.

When conglomerates encounter financial difficulties, they often sell assets to raise cash and pay off debts. But governments in the United States and elsewhere have begun to increase scrutiny of sales of assets to foreign entities buyers. Many governments have the power to restrict certain sales of assets on the basis of national interest concerns.

In Mission Product Holdings, Inc. v. Tempnology, LLC, 587 U.S. ___ (2019), the Supreme Court held that a debtor’s rejection of a trademark license does not eliminate the licensee’s right to use the trademark through the completion of the contract, settling a split in the Circuits. The Supreme Court also ruled that the case was not moot, despite the bankruptcy estate’s distribution of all of its assets, which may have important implications for the developing jurisprudence on mootness in bankruptcy cases.

In In re 1141 Realty Owner LLC, et al., No. 18-12341 (SMB), 2019 WL 1270818 (Bankr. S.D.N.Y. March 18, 2019), Bankruptcy Judge Stuart M. Bernstein of the U.S. Bankruptcy Court of the Southern District of New York recently reaffirmed that upon sufficient contractual language, "make whole" prepayment premiums are enforceable under New York law even after loan acceleration. The court emphasized that the language of the contract provided for such a result and that this was an enforceable liquidated damages clause under New York law.

In a unanimous 25 February panel decision, the Second Circuit Court of Appeals held that the trustee liquidating Bernard L. Madoff’s investment firm can claw back billions in Ponzi scheme proceeds from investors who received the proceeds indirectly through non-U.S. “feeder funds” (funds that aggregate investor capital to invest in funds such as Madoff’s).

In a recent decision, EMA GARP Fund v. Banro Corporation, No. 18 CIV. 1986 (KPF), 2019 WL 773988 (S.D.N.Y. 21 February 2019), District Judge Katherine Polk Failla of the U.S. District Court for the Southern District of New York enforced a foreign reorganization plan in the United States on the basis of international comity, notwithstanding that no application for recognition and enforcement had been made under Chapter 15 of the U.S. Bankruptcy Code. Banro Corp.