Coronavirus continues to have serious financial implications for businesses and this week the wrongful trading provisions have been suspended (for the second time) until 31 April 2020.
Hong Kong's insolvency system is famous for its lack of statutory corporate rescue procedure ("CRP"). Owing to the lack of CRP, financially distressed companies may only recourse to rescue their business with (i) a non-statutory consensual agreement with major creditors to restructure debts, or (ii) a scheme of arrangement under the Companies Ordinance (Cap. 622). These options, however, have many problems such as being expensive, impracticable, inflexible and tedious.
1 November 2020 ONC Corporate Disputes and Insolvency Quarterly Dear Clients and Friends, This special newsletter aims to regularly update practitioners on important and noteworthy cases in the areas of corporate disputes and insolvency in Hong Kong, the UK and other common law jurisdictions. We would also seek to give alert on important legislative and regulatory initiatives from Hong Kong.
The Golden Globe Award-winning Netflix series is not the only ‘Crown’ returning prior to Christmas 2020. HMRC’s preferential creditor status is also being restored on 1 December 2020.
Introduction
Section 209(1) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) empowers the Hong Kong court to make an order staying the winding-up proceedings after the winding-up order is made upon the application of, among others, a contributory. However, in the case of Safe Castle Limited v China Silver Asset Management (Hong Kong) Limited [2020] HKCFI 1028, Harris J made it clear that the court will be reluctant to exercise its discretion to stay a winding-up order pending appeal.
Introduction
Introduction
Introduction
We are still in the early days of the economic shock of the coronavirus, with positive trends not yet clear. Restructuring specialists at Keystone Law have combined our experiences of enquiries from businesses, Insolvency Practitioners (IPs) and other stakeholders during lockdown and noted the following developments which will help businesses and advisors prepare for a post-lockdown business environment:
It’s becoming apparent that despite the government’s intervention with business rate holidays, relief against forfeiture and furloughing of staff during the coronavirus pandemic, many licensed, leisure and retail businesses are in dire straits as a result of closure. Whilst emergency insolvency legislation is in place to provide a breathing space for companies, this will only help financially distressed but viable businesses. As a result, it is unfortunate that insolvencies already reported in the press will just be the tip of the iceberg.