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.
Nature abhors a vacuum. Equipment finance abhors bankruptcy. Whether in securitized or large, single-asset financings, financiers structure transactions to be “bankruptcy remote.” This article will discuss a December 2021 bankruptcy court bench ruling that found certain protective provisions to be unenforceable and describe how those provisions might have been devised to survive the court’s scrutiny.
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
Chapter 15 of the U.S. Bankruptcy Code provides a streamlined process for recognition (a form of comity) of a foreign insolvency proceeding. However, courts are divided as to whether a foreign debtor must satisfy the general definition of “debtor” as that term is used in section 109(a) of the Bankruptcy Code, which requires a debtor seeking bankruptcy relief to reside or have a domicile, a place of business, or property in the United States.
In the latest edition of Going concerns, Stephenson Harwood's restructuring and insolvency team touches on the extent of the automatic stay arising from the recognition of a foreign main proceeding under the Singapore Model Law cross-border recognition regime, the requirements for a pre-pack scheme of arrangement under the recent Singapore Insolvency, Restructuring and Dissolution Act 2018, and the importance of Environmental, Social and Governance ("ESG") in the restructuring context.
Contents
In 2005, the United States adopted the Model Law on Cross-Border Insolvency, promulgated by the United Nations Commission on Internal Trade, under chapter 15 of the United States Bankruptcy Code. In so adopting, Congress intended chapter 15 “to be the exclusive door to ancillary assistance to foreign proceedings.” H.R.Rep. No. 109–31, at 110–11 (2005). Notwithstanding the express congressional intent, not all courts have required chapter 15 relief as a prerequisite to seeking relief in a pending civil litigation against a debtor.
An important decision for employers and administrators has been handed down by the High Court in the case of R (Palmer, Forsey) v Northern Derbyshire Magistrates' Court [2021] EWHC 3013. The Judgment acts as a stark reminder to employers and company personnel about the criminal liability they can face for failing to notify the Secretary of State of proposed collective redundancies as well as confirming that that an administrator can be prosecuted personally.
Background