Chinese firms acquiring foreign assets has been a hot topic for some time. But one often overlooked question is what happens to those overseas assets if the Chinese business fails? Given the scale of Chinese investment overseas and the financial problems currently being experienced by many Mainland businesses, this question is of growing importance. Two recent decisions – one in Hong Kong and one in New York – address this issue and point to the growing demystification and recognition of Chinese insolvency law outside China.
What is the preventive restructuring framework and what are its key features?
Where there is a likelihood of insolvency (but importantly where the debtor is not yet insolvent as defined by national law), Member States must provide debtors with access to a preventive restructuring framework that enables them to restructure, with a view to preventing insolvency and ensuring their viability.
In February, following oral argument before the U.S. Supreme Court in Mission Product Holdings, Inc. v. Tempnology, LLC, we wrote about the hugely important trademark law issue presented by this case, namely: If a bankrupt trademark licensor “rejects” an executory trademark license agreement, does that bankruptcy action terminate the licensee’s right to continue using the licensed trademark for the remaining term of the agreement?
On 28 March 2019 the European Parliament adopted a Directive on insolvency, restructuring and second chance (the Directive). This project has had a long tail, following a Commission Recommendation issued in 2014 and, after that had no impact, a draft Directive in November 2016. This draft Directive is now about come to fruition. It has three main aims
1. to ensure that member states have a preventive restructuring framework – which includes a restructuring plan;
On 28 March 2019 the European Parliament adopted a Directive on insolvency, restructuring and second chance (the Directive). This project has had a long tail, following a Commission Recommendation issued in 2014 and, after that had no impact, a draft Directive in November 2016. This draft Directive is now about come to fruition. It has three main aims
Are you prepared to take advantage if one of your competitors falls into difficult times or enters an insolvency process? Do you know your way around buying from a distressed seller? What are the things you need to know? How can you prepare? What will make your bid most attractive?
Recent high profile collapses such as HMV have highlighted the opportunities that can be found within the distressed space – if you are prepared and know how to act swiftly.
How would your business be impacted if one of your critical suppliers entered insolvency proceedings? What losses could you suffer, and how would you maintain continuity of supply?
Recent high profile collapses such as Carillion have highlighted this issue, with counterparties suffering significant disruption upon its failure. In the context of increasing financial uncertainty – not least because of Brexit – companies should take a hard look at their supply chain in order to assess and mitigate counterparty risk.
Oral argument before the Supreme Court was held on February 20 in the much-watched and even more intensely discussed trademark dispute Mission Product Holdings, Inc. v. Tempnology, LLC. The case presents the difficult and multifaceted question: Does bankruptcy law insulate the right of a trademark licensee to continue using the licensed mark despite the bankrupt trademark licensor’s decision to “reject” the remaining term of the trademark license?
A recent English Court of Appeal judgment has resolved some doubts regarding the use of adjudication procedures in insolvency.
Hong Kong’s Financial Secretary Paul Chan said last week that there were plans to introduce a bill this year into the city’s Legislative Council to put in place a long-awaited and much needed corporate rescue procedure for Hong Kong.