On 23 October 2024, Deputy High Court Judge Le Pichon of the Court of First Instance in the High Court of the Hong Kong SAR granted recognition and assistance to Chan Ho Yin (also known as Michael Chan) (“Mr Chan“) of Kroll (HK) Ltd and Elaine Hanrahan (“Ms Hanrahan“), the joint official liquidators of Bull’s-Eye Limited (“Bull’s-Eye”) following a letter of request issued by the British Virgin Islands (“BVI”) Eastern Caribbean Supreme Court.
In the case of Re China Properties Group Limited (in Liquidation) [2023] HKCFI 2346, the Hong Kong Court has shown its commitment to providing assistance to local liquidators appointed by it by asserting in personam jurisdiction over a Hong Kong based director of a company incorporated in a foreign jurisdiction.
The Quincecare duty has become a popular tool for companies (or their liquidators) to claim against banks for funds misappropriated on wrongful payment instructions. It requires a bank to refrain from executing a payment order if and for so long as it was put on inquiry by having reasonable grounds for believing that the order was an attempt to misappropriate funds.
Due to the recent challenging economic environment, the law’s treatment of creditors’ interests in a restructuring or insolvency has been a hot topic. From a creditor’s perspective, its objective will be straightforward: to maximize its recovery as soon as possible when its interests are put at risk by financial challenges facing the debtor. From a shareholder’s perspective, its agenda will generally be quite different: to achieve certainty and stability through a debt restructuring so that the company can stay afloat and carry on business without the risk of a winding up order.
With a marked increase in large-scale cross-border insolvency and restructuring proceedings in the Cayman Islands and elsewhere, there is a greater focus on principles of comity and co-operation between courts and collaboration between officeholders.
What is the so-called "creditor duty"?
This is the duty, introduced into English common law by the leading case of West Mercia Safetywear v Dodd1 in 1988, of company directors to consider, or act in accordance with, the interests of the company's creditors when the company becomes insolvent, or when it approaches, or is at real risk of insolvency.
Background
On 22 July 2022, the English High Court sanctioned Houst Limited’s (“Houst” or the “Company”) restructuring plan (the “Restructuring Plan”), which significantly, is the first time a Restructuring Plan has been used to cram down HM Revenue & Customs (“HMRC”) as preferential creditor.1
Background
On 24 June 2022, the Honourable Mr Justice Harris (of the High Court of Hong Kong Special Administrative Region) granted assistance to Cayman Islands appointed Joint Provisional Liquidators (the “JPLs”) of Seahawk China Dynamic Fund, a solvent company incorporated in the Cayman Islands (the “Company”). Harris J ruled that the JPLs have the power to act as agents of the Company in Hong Kong. Reasons were delivered on 4 July 2022.
In the recent judgment In the Matter of GTI Holdings Limited delivered on 15 March 20221 , the Cayman Islands Grand Court reiterated the importance of principles of comity in cross-border insolvency matters and the central function of the place of incorporation.
A copy of the full judgment is available here.
Background
Conyers were instructed by Silver Base Group Holdings Limited (“Silver Base”) in relation to a successful application for the appointment of “light-touch” provisional liquidators for restructuring purposes before the Grand Court of the Cayman Islands.