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Introduction

The recent decision by the Hong Kong* court in Re Ando Credit Ltd [2020] HKCFI 2775 marks its first appointment of provisional liquidators[1] over a Hong Kong company with the express purpose of allowing the liquidators to seek recognition in China Mainland.

On March 27, 2020, President Trump signed the Coronavirus Aid, Relief, and Economic Security Act or the “CARES Act.”The legislation includes a historic $2 trillion aid package intended to stabilize the U.S. economy and provide disaster relief aid to American citizens and businesses impacted by the COVID-19 pandemic. The emergency aid package, which is by far the largest in American history, contains many provisions focused on providing relief. Among these are certain temporary amendments to Title 11 of the United States Code (the “Bankruptcy Code”).

INTRODUCTION

In times of unprecedented market uncertainty, assessing financial exposure to your counterparties is essential. Volatility in the commodities markets and a public health crisis create the perfect storm for financial distress for companies in nearly every industry. Risk is inherent in business and that risk is heightened when you are dealing with a company in financial distress. Managing these risks begins with knowing your counterparties and understanding your legal position with respect to those counterparties.

Countries across the world are actively taking measures to stem the spread of COVID-19 by encouraging and, in some cases, forcing social distancing. One of the most common measures employed so far is the closing of non-essential stores, bars and restaurants for several weeks, if not longer. Several large retailers, such as JCPenney, Ross Stores, Kirkland’s Inc., Marshalls and TJ Maxx, have announced store closings for two weeks in efforts to help stop the spread of COVID-19.

近年市场竞争及经营环境不确定性持续增加的情况下,不少企业有可能面临营运及财务困难,导致债务违约的情况有上升的趋势。如果债务人资不抵债,债权人有权利用破产清盘的程序接管债务人的资产并尽量实现回收最大化。根据香港*破产管理署公布的统计数字,在2019年1月至10月期间,强制公司清盘案及破产案呈请的数字达到7,062宗。我们藉此介绍近期香港法院就破产清盘颁发的两个重要判决。

1. 仲裁协议的存在是否会影响破产清盘程序的开展?

香港上诉法院近期在But Ka Chon v Interactive Brokers LLC [2019] HKCA 873一案中,考虑了债权相关的合同中约定有仲裁条款管辖的情况下,债权人利用法院破产清盘程序的权利会否受限。由于很多的商业协议均载有仲裁条款,法院的判决对债权人的权利及可采取的救济手段有重要意义。

在该案中,上诉人(证券公司客户,即债务人)与被上诉人(证券公司,即债权人)签订的客户协议约定双方之间的争议以仲裁解决。由于上诉人没有偿还保证金账户的欠款,债权人在香港法院申请上诉人破产。上诉人以双方已经约定仲裁为其中一个理由,请求上诉法院撤销债权人发出的法定偿债书。

With growing competition and global market uncertainties in recent years, businesses may experience operational and financial challenges, resulting in debt defaults. A creditor is entitled to petition for the bankruptcy and liquidate the debtor’s assets in order to try to achieve a maximum recovery. Statistics published by the Official Receiver’s Office noted 7,062 petitions for compulsory liquidation and bankruptcy between January and October 2019. In this client alert, we discuss two significant and recent judgments in respect of insolvency law given by the Hong Kong* courts.

Beauty Brands, LLC, along with two subsidiaries and affiliates, has filed a petition for relief under chapter 11 in the Bankruptcy Court for the District of Delaware (Lead Case No. 19-10031).

Angel Medical Systems, Inc., a developer of medical devices based in Eatontown, NJ, has filed a petition for relief under Chapter 11 in the Bankruptcy Court for the District of Delaware (Case No. 18-12903).

Alcor Energy, LLC filed a petition for relief under Chapter 11 in the Bankruptcy Court for the District of Delaware (Case No. 18-12839).

White Eagle Asset Portfolio, LP, has filed a petition for relief under Chapter 11 in the Bankruptcy Court for the District of Delaware (Lead Case No. 18-12808).