Hong Kong is a common law jurisdiction, and its legal system is based on English law. Following Hong Kong’s handover to China on 1 July 1997, the Basic Law of Hong Kong is the constitutional document of the Hong Kong Special Administrative Region. Article 8 of the Basic Law provides that: “laws previously in force in Hong Kong, that is, the common law, rules of equity, ordinances, subordinate legislation and customary law shall be maintained, except for any that contravene [the Basic Law], and subject to any amendment by the legislature of the Hong Kong Special Administrative Region.”
Asset freeze measures enacted by the United Kingdom against designated persons (DPs) can, under certain circumstances, extend to entities “owned or controlled” by DPs. To date, there have been few—and at times partly contradictory—English court cases addressing the “ownership and control” criteria under the UK sanctions regime. The latest judgment in Hellard v OJSC Rossiysky Kredit Bank sought to reconcile the previous guidance provided by the courts in the Mints and Litasco cases.
The Privy Council has recently delivered a landmark judgment on the interplay between arbitration agreements and winding up petitions. The Board held that the English case of Salford Estates (No 2) Ltd v Altomart Ltd [2014] EWCA Civ 1575; Ch 589, which had adopted a pro-arbitration approach to stay or dismiss winding up petitions based on debts covered by arbitration agreements, even if the debts were not genuinely disputed on substantial grounds was wrongly decided.
The US Supreme Court ruled in a landmark 5-4 decision on June 27, 2024 that nonconsensual third-party releases, as proposed in Purdue Pharma’s bankruptcy plan, were not permissible under the Bankruptcy Code. A nonconsensual third-party release serves to eliminate the direct claims of third parties against nondebtor parties without soliciting the consent of such affected claimants. This contrasts with consensual releases and opt-in or opt-out mechanisms permitted by courts.
Welcome to the 2024 edition of "From Red to Black", our annual review of significant developments and topical issues in the Australian restructuring and insolvency market.
Regulator intervention and government stimulus packages in response to market shocks often mask underlying systemic distress and disrupt economic cycles. With companies now largely weaned off COVID-19 support packages, insolvencies have significantly increased.
By following certain steps and focusing on relevant courses of action, directors of startups can leverage the Safe Harbour provisions to increase their chances of navigating financial difficulties and achieving a better outcome for their company.
The Alita matter serves as a good illustration that if you intend to seek leave under section 444GA(1)(b) you should act swiftly and with regard to the potential regulatory risk.
With the mass of reports, reviews and consultations that have already occurred, there is no lack of critiques, complaints and proposed solutions. The risk is that these will (once again) be cherrypicked for fixes, rather than form the basis for a comprehensive review.
It has been 33 years since the "recession we had to have" in 1991. Fears that Australia would enter a technical recession during 2023 didn’t eventuate.
Digital assets may be new, but existing English insolvency laws and principles can deal with them. So finds the UK Jurisdiction Taskforce (UKJT) in its ‘Legal Statement on Digital Assets and English Insolvency Law’, published this week.
Key takeaways include:
The European Commission has published a new proposal for a Directive that would harmonise certain aspects of insolvency law across the EU. This proposal, following the enactment of Directive (EU) 2019/1023, illustrates a strong desire to facilitate the free movement of capital within Europe. A significant part of the proposed Directive is designed to make laws governing avoidance actions uniform across the EU.