Hong Kong’s insolvency regime is based mainly on that of the United Kingdom. The legislation concerning corporate insolvency is contained largely in the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap 32) (“CWUMPO”) and the Companies (Winding-up) Rules. The corporate insolvency and winding up provisions in the legislation are broadly based on the Companies Act 1929 and the Companies Act 1948 of the UK. The last major amendment of those provisions was made in 2016.
A guide to restructuring and insolvency issues and procedures in Hong Kong
Contents
For those who missed it the Insolvency Service published an excellent research report at the end of June which focuses on the treatment of landlords in company voluntary arrangements (CVAs). This was against the backdrop of a large number of "landlord" CVAs in recent years – particularly in the retail and casual dining sectors – where landlords have often complained that they have been unfairly treated compared to other compromised creditors. The report concludes that landlords are, broadly speaking, equitably treated compared to other classes of unsecured creditors.
Seahawk China Dynamic Fund [2022] HKCFI 1994 (date of reasons for decision: 4 July 2022)
Introduction
The Insolvency Service has published a consultation on the implementation of two UNCITRAL "model laws" relating to insolvency: the Model Law on Recognition and Enforcement of Insolvency-Related Judgments (MLIJ), and the Model Law on Enterprise Group Insolvency (MLEG). The UK has already enacted legislation based on the Model Law on Cross-Border Insolvency, in the form of the Cross-Border Insolvency Regulations 2006 (CBIR).
The Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020, commonly referred to as the "Breathing Space Regulations", came into force on 4 May 2021. The Regulations provide eligible individuals with problem debt a period of protection from their creditors known as a "breathing space moratorium".
What effect will government proposals have on insurers, policyholders and other stakeholders?
The Insolvency Service has published an interim report which evaluates three permanent changes to the insolvency regime as introduced by The Corporate Insolvency and Governance Act 2020 (CIGA): restructuring plans; the standalone moratorium and the restriction on contractual termination rights (so-called ipso facto clauses). The takeaway messages are as follows:
In the matter of an application for recognition and assistance by the provisional liquidator of Global Brands Group Holding Limited (in liquidation) [2022] HKCFI 1789 (date of decision: 23 June 2022)
The Hong Kong Court has recently granted recognition and assistance to the Bermuda provisional liquidator of Global Brands Group Holding Limited (in liquidation) (Global Brands / Company). Stephenson Harwood acted for the provisional liquidator.
Shandong Chenming Paper Holdings Limited v Arjowiggins HKK 2 Limited [2022] HKCFA 11 (date of judgment 14 June 2022)
Introduction
Insolvency figures for May 2022 were published by the Insolvency Service on 17 June, and reveal an increase in corporate insolvencies both compared to pandemic and pre-pandemic levels.