Da Yu Financial Holdings Limited (formerly known as China Agrotech Holdings Limited) (in liquidation) [2019] HKCFI 2531 (date of judgment 17 October 2019)
Introduction
Welcome to the 3rd edition of Going Concerns where we strive to bring you the latest updates on restructuring and insolvency law. In this issue, we provide:
1. An update on the extent of financial disclosure that may be ordered against a company undergoing a scheme moratorium under s. 211B(6) of the Singapore Companies Act (Cap. 50);
2. A further commentary on the Insolvency, Restructuring and Dissolution Bill; 3. A commentary on the Singapore recognition process of foreign bankruptcies;
How the recent changes will impact restructurings of listed companies
This update explains the key changes in cross-border insolvency proceedings if the UK leaves the EU without a deal on 31 October 2019 (or at a later date). Importantly, a no-deal exit will impact how and where such insolvency proceedings can be raised in a post-Brexit future.
A bit of background
While the UK is still an EU Member State, EU Regulations provide a clear framework for conducting cross-border insolvency proceedings. The EU Insolvency Regulations (the 2000 Insolvency Regulation and the 2015 Recast Insolvency Regulation) include provisions which:
The liquidation of Thomas Cook Group last month – and the ensuing cancellation of all flights and repatriation of 140,000+ customers – has prompted fresh scrutiny of the UK’s approach to airline insolvency.
In Skandinaviska Enskilda Banken AB v Conway & another [2019] UKPC 36, the Privy Council upheld the decision of the Court of Appeal of the Cayman Islands that the appellant bank, SEB, was required to repay redemption payments held to be preferences notwithstanding that it had received the funds in the capacity of nominee, and had already distributed the funds to the beneficiaries without any ability to recover them.
Facts
Hsin Chong Construction Company Limited [2019] 原诉法庭 1531 (判决日期2019年6月13日)
合资企业协议通常会包含如下条款：在发生特定事件（包括违约方破产）时，赋予无过错方将违约方排除在合资企业之外的权利。本案中，法庭对该类条款是否无效进行了考虑。
背景介绍
2013年11月，Hsin Chong Construction Company Limited (以下简称“该公司”)与Build King Construction Limited （以下简称“Build King”）签订了一份合资企业协议（“合资企业协议”）并成立了一家非法人型合资企业（“合资企业”），目的是向香港一个政府建设项目（“该项目”）提交投标。该公司和Build King在合资企业中持有的权益分别为65%和35%。香港政府于2016年6月22日将该合同授予给了该合资企业。
该公司于2017年陷入财务困境，并于2018年8月27日面临清盘的命运。
2018年12月13日，Build King行使了其在合资协议下的权利，以该公司破产为由，将该公司从合资企业中排除（“排除条款”）。
Back in March, we highlighted the launch of a consultation following the UK government’s proposal to introduce a new “secondary preferential” status for HMRC. Further details of the proposal can be found here : HMRC launches consultation on new “secondary preferential” status.
As the insolvency profession in Scotland continues to get to grips with the new corporate insolvency rules, Re Sprout Land Holdings Ltd (in Administration) serves as a timely reminder not to forget the basics when dealing with the appointment of administrators by the directors of a company.