Corporate Update is our fortnightly bulletin highlighting the latest legal and regulatory developments which we consider to be of relevance to in-house corporate counsel.
The automatic stay is a procedural tool in a bankruptcy case that effectively halts efforts by creditors to collect on a debtor’s outstanding obligations. As discussed in more detail in our prior post, immediately upon the filing of a bankruptcy petition, a “bankruptcy estate” is created, which includes virtually all assets of the debtor.
Federal Rule of Bankruptcy Rule 3002.1 went into effect December 1, 2011. It was implemented to address a perceived problem in “cure and maintain” Chapter 13 cases (cases in which the debtor cures any pre-petition arrearage and maintains monthly post-petition payments on long-term loans) – that mortgage creditors were not providing the debtor with notice of post-petition payment changes and fees assessed post-petition, causing debtors to often exit a successful Chapter 13 with a delinquent loan.
Many creditors have been warned of the need to halt collection efforts once they are put on notice that a debtor has filed for bankruptcy. However, the “why” behind this warning, mainly the automatic stay, is often misunderstood or disregarded. Since violations of the automatic stay can have serious ramifications, it is crucial that creditors know what the automatic stay is, what it protects, and how to get relief from the stay so that the creditor can proceed with collection efforts.
What Is the Automatic Stay? What Does It Protect?
The Second Circuit’s August 2021 decision in In re Gravel, 6 F. 4th 503, has already received considerable attention and generated much debate over the last few months.
In certain sectors, in particular in technology and life sciences, it is common for companies to combine forces in order to maximise business opportunities. Only rarely can a single company undertake every aspect of (for example) invention, development and exploitation by itself. A company may decide to contract out such activities, or to collaborate with a third party with different skills or resources. Such a collaboration may take the form of a joint venture.
A few changes to the Federal Rules of Bankruptcy Procedure became effective on December 1, 2021. The most noteworthy change relates to Bankruptcy Rule 9036, which addresses notice and service by electronic transmission.
A district court judge recently reversed and remanded a well-known bankruptcy decision discharging a significant student loan debt.
经营本地业务之香港注册公司的清盘呈请个案现时占少数。此外，我每周都会收到一些在离岸司法管辖区注册成立并且在本地上市的公司的“温和”临时清盘人在申请认可和协助时拟采用 Z-Obee 一案的技巧…”
--- 夏利士法官（中国汇源果汁集团有限公司案 [2020]HKCFI 2940 at [55]）（裁决日期：2020 年 11 月 19 日）
跨境破产在香港日益活跃。以上引述的一段话说明了香港公司法院原讼法庭处理的清盘和破产程序案件很大部分源于申请承认及向外国清盘人提供协助。
早前发布的客户简报（原文见此处）探讨了向香港法院申请将外国公司强制清盘的问题。本客户简报考虑另一个问题， 就是香港法院对该外国公司注册成立的司法管辖区所发出的清盘令可以给予的承认和协助。
一般原则 香港並非《联合国国际贸易法委员会国际商事仲裁示范法》(UNCITRAL Model Law)的签署方，也没有制定该法例。承认和协助外国破产程序的权力源自普通法。
以下为典型的事实例子：一家无力偿债的公司在香港境外（通常为热门的离岸司法管辖区）注册成立但其资产位于香港。该公司的海外注册地批准就清盘呈请颁布清盘令，并任命临时清盘人。临时清盘人随后向香港法院申请“承认”该海外命令，使该清盘令通过香港法院授予的“协助”在香港具有域外适用性。