Hong Kong’s insolvency regime is based mainly on that of the United Kingdom. The legislation concerning corporate insolvency is contained largely in the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap 32) (“CWUMPO”) and the Companies (Winding-up) Rules. The corporate insolvency and winding up provisions in the legislation are broadly based on the Companies Act 1929 and the Companies Act 1948 of the UK. The last major amendment of those provisions was made in 2016. 

A guide to restructuring and insolvency issues and procedures in Hong Kong

Contents

Seahawk China Dynamic Fund [2022] HKCFI 1994 (date of reasons for decision: 4 July 2022)

Introduction

In the matter of an application for recognition and assistance by the provisional liquidator of Global Brands Group Holding Limited (in liquidation) [2022] HKCFI 1789 (date of decision: 23 June 2022)

The Hong Kong Court has recently granted recognition and assistance to the Bermuda provisional liquidator of Global Brands Group Holding Limited (in liquidation) (Global Brands / Company). Stephenson Harwood acted for the provisional liquidator.

Shandong Chenming Paper Holdings Limited v Arjowiggins HKK 2 Limited [2022] HKCFA 11 (date of judgment 14 June 2022)

Introduction

In the matter of Rare Earth Magnesium Technology Group (provisional liquidators appointed) (for restructuring purposes only) [2022] HKCFI 1686 (date of judgment: 6 June 2022)

Up Energy Development Group Limited [2022] HKCFI 1329 (date of decision: 6 May 2022)

Introduction

The 3 core requirements are factors considered by the Hong Kong Court when deciding whether to exercise its discretion to wind up a foreign incorporated company in Hong Kong.

The issue

A "no action" clause will appear in almost all English law-governed bond trust deeds.

A no action clause provides that a bondholder (or anyone entitled to payments on the bonds) cannot, initially, proceed directly against the issuer. Instead, the right to bring a cause of action resides with the trustee and it is only if the trustee, having become bound to take action, fails to do so within a reasonable time (with the failure continuing) that a bondholder can then itself proceed directly against the issuer.

¹ The Third Circuit also affirmed a judgment that awarded the senior creditor damages for the misapplication of such collateral proceeds in violation of the intercreditor agreement’s turnover provision.

Ozner Water International Holding Limited (In Liquidation) [2022] HKCFI 363 (date of decision: 27 January 2022)

Hong Kong Fresh Water International Group Limited (In Liquidation) [2022] HKCFI 924 (date of decision: 6 April 2022)

Introduction

On March 15, 2022, the Financial Oversight and Management Board for Puerto Rico announced that the Plan of Adjustment for the Commonwealth of Puerto Rico became effecfive, more than four years aher Puerto Rico commenced restructuring proceedings under Title III of the Puerto Rico Oversight, Management and Economic Stability Act (“PROMESA”). PROMESA is a bespoke piece of federal legislafion enacted in 2016 to address Puerto Rico’s debt crisis, and incorporates most of chapter 9 of the Bankruptcy Code.