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.

1. State of the Restructuring Market

1.1 Market Trends and Changes

State of the Restructuring and Insolvency Market

There were 27,359 insolvencies in France as of the end of September 2021, down 25.1% from the same period in 2020, and down 47.9% from September 2019. Such reduction is relatively stable across all sectors, including those most severely affected by the health-related restrictions, such as accommodation and food services (down 44.2% year-on-year) and trade (down 28.1% year on year).

Fewer Insolvencies for More Opportunities

At the end of 2021, corporate bankruptcies (for most company sizes and in most sectors) were at their lowest level compared to the pre-COVID-19 figures from 2019, with a 50% drop in insolvency proceedings and a 10% decrease in pre-insolvency situations. This was largely due to the temporary impact of government emergency measures and support, including:

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。

霍金路伟最新一期《投资中国：法律监管信息速递》专题系列将为您深度探秘下列安排：