Background

Land and buildings Ships and aircraft Other tangible assets Liens Retention of title Intangible assets Personal security Debentures Form of debentures Assets covered by debentures Trust receipts or letters of hypothecation

Receivership

Appointment of a receiver Receivers' powers Receivers' obligations Termination of the receivership

Deacons contacts

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Types of security

While every effort has been made to ensure the accuracy of the information contained in this booklet, it is only a summary and should not be relied upon as a substitute for detailed advice in individual cases.

Deacons 2020

Contents

Introduction Corporate insolvency

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Available procedures

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Liquidation

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Members' voluntary liquidation

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Creditors' voluntary liquidation

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Compulsory liquidation

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Which procedure?

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Receivership

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Scheme of arrangement3

In recent years the Hong Kong Companies Court has dealt with a large number of applications for recognition and assistance from the Courts of various overseas jurisdictions in relation to cross border insolvency matters. The Court will now routinely grant orders of recognition and assistance to liquidators of companies incorporated in Commonwealth jurisdictions such as the Cayman Islands, Bermuda and the British Virgin Islands, which are all common law jurisdictions which have insolvency law regimes which are in many ways similar to Hong Kong’s own regime.

In Re Southwest Pacific Bauxite (HK) Ltd [2018] 2 HKLRD 449, the Honourable Mr Justice Harris held that a petition to wind up a company on the ground of insolvency should “generally be dismissed” where:

In recent years, the Hong Kong courts have been required to deal with a significant number of cases concerning cross border insolvency. Most notably, a number of cases have arisen where insolvency practitioners appointed by overseas courts seek recognition of their authority to act on behalf of overseas companies placed in liquidation or a similar insolvency regime, and to seek authority to use powers equivalent to those granted to liquidators by the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap.

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?

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?

In Re Kin Ming Toy Manufactory Ltd (in liquidation), HCCW 402/2015 [2018] HKCFI 2057 and 2285, Harris J of the Court of First Instance dismissed an application under section 182 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (the Ordinance), Cap. 32, brought by the liquidators of a company in liquidation seeking to void two payments made out of the company’s bank account after commencement of the winding up proceedings, and further ordered that the liquidators be held personally liable for the costs of the unsuccessful application.

Key Facts

In the past couple of decades, jurisdictions all over the world have been required to grapple with problems arising out of corporate insolvencies with cross-border elements. Solving these problems has required considerable judicial flexibility and innovation, but judges in some jurisdictions have been helped by the enactment of legislation designed to deal with cross-border status.