Many businesses continue to experience unprecedented pressure on their cash flow given, among other things, the continued fall-out from the global pandemic, the war in Ukraine, the cost of living crisis, rising interest rates, the end of cheap debt and the expected global downturn.
To mitigate their exposure to personal liability, it's important that directors of insolvent companies or companies in the zone of insolvency comply with their duties to act in the best interests of the company as a whole. This includes the interests of creditors as a whole.
Background
The Cayman Government has restricted entry to the Island since mid-March and is currently operating a curfew system day and night for residents other than essential workers, with the exception of exercise or essential trips such as to the supermarket or for medical reasons.
Hong Kong has not adopted into domestic legislation the UNCITRAL Model Law on Cross Border Insolvency.
Unlike jurisdictions which have adopted the Model Law, e.g. the United Kingdom, an application to the Hong Kong Courts for recognition of foreign insolvency proceedings requires a balancing exercise of competing aims: assisting the foreign court conducting the main insolvency proceedings in achieving a universal distribution of assets, and ensuring that creditors seeking the Hong Kong Courts' assistance are treated fairly and equitably in enforcing their rights.