Almost a decade into the current bull market, many economic prognosticators are warning of a coming downturn. At the same time, political upheaval and uncertainty around the world is changing the landscape for cross-border trade—including mergers and acquisitions activity. Hogan Lovells partners Richard L. Wynne and David A. Gibbons recently discussed how that macro environment is impacting distressed M&A today, and what steps business leaders and dealmakers should be taking to prepare for a shift in the economic winds.

Just in time for the Chinese New Year, a Hong Kong court has taken a major step forward in the developing law on cross-border insolvency by recognizing a mainland Chinese liquidation for the first time. In the Joint and Several Liquidators of CEFC Shanghai International Group Ltd [2020] HKCFI 167, Mr. Justice Harris granted recognition and assistance to mainland administrators in Hong Kong so they could perform their functions and protect assets held in Hong Kong from enforcement.

Just in time for Chinese New Year, a Hong Kong court has taken a major step forward in the developing law on cross-border insolvency by recognising a mainland Chinese liquidation for the first time. InJoint and Several Liquidators of CEFC Shanghai International Group Ltd [2020] HKCFI 167, Mr Justice Harris granted recognition and assistance to mainland administrators in Hong Kong so they could perform their functions and protect assets held in Hong Kong from enforcement.

In the recent decision of Boensch as Trustee of the Boensch Trust v Scott Darren Pascoe [2019] HCA 49, the High Court has clarified whether property held by a bankrupt on trust for another vests in the bankrupt's trustee in bankruptcy, and the circumstances in which a trustee in bankruptcy will have reasonable cause to lodge a caveat to protect an interest in the trust property.

Background

Foreword Head of Real Estate Disputes Mathew Ditchburn considers what 2020 may have "in store". Five minutes with: Hebe Morgan We chat to real estate associate Hebe Morgan who is currently on secondment at M&G Real Estate.

CVA Special: Mathew Ditchburn reports

In the recent decision of In the matter of Parkway One Pty Limited (in liquidation) [2019] NSWSC 1495 (Parkway), Rees J dismissed an application to terminate the winding up of Parkway One Pty Ltd (in liquidation) (the Company) due to inconclusive evidence as to the solvency of the Company and, having regard to the non-compliance by its director of her statutory duties and the likelihood of the Company not being able to service the current and foreseen indebtedness, her Honour held that it would be contrary to commercial morality to terminate the wi

In a recent decision, the Federal Court of Australia declined to annul a bankruptcy in circumstances where the bankrupt claimed the proceedings should have been adjourned given his incarceration and solvency at the time the order was made: Mehajer v Weston in his Capacity as Trustee of the Bankrupt Estate of Salim Mehajer [2019] FCA 1713. The judgment is useful in reiterating what factors the Court will consider when deciding whether to order an annulment under section 153B(1) of the Bankruptcy Act 1966 (Cth) (the Act).

Generally, once a company enters into liquidation, litigation against that company cannot be commenced or be continued without the leave of the Court (Corporations Act 2001, s 471B). However, occasionally a liquidator may cause a company to commence or defend litigation after the commencement of the winding up. What happens if the company in liquidation is unsuccessful in that litigation and is subject to an adverse cost order? How will such an adverse cost order rank amongst other competing creditors?

Getting to the top

Wi­der­le­gung der Ver­mu­tung ei­ner ein­ge­tre­te­nen Zah­lungs­un­fä­hig­keit durch Ein­ho­lung ei­nes Sach­ver­stän­di­gen­gut­ach­tens (BGH, Be­schluss vom 12. Sep­tem­ber 2019 – IX ZR 342/18)

Ein kürz­lich er­gan­ge­ner Be­schluss des BGH setzt sich mit der Fra­ge aus­ein­an­der, wie der An­fech­tungs­geg­ner der An­nah­me der Zah­lungs­un­fä­hig­keit des Schuld­ners im Pro­zess ent­ge­gen­tre­ten kann.

Germany has notoriously broad voidability laws. As a rule of thumb, any payment by a third party has high voidability risks if the third party has no obligation to make the payment under the contract. Such payments qualify as incongruent (3 months hardening period, very few further requirements) and often qualify as gratuitous (4 years hardening period, without any further requirements). A recent decision of the German High Court has stirred hope that the Court may give some leeway to cash pool payments by group companies.