A company enters into compulsory liquidation when the court makes a winding up order. Upon the order being made, the Official Receiver ("OR") is automatically appointed as liquidator, however, the company's creditors may nominate an alternative licensed insolvency practitioner to act as liquidator. A liquidator's primary function is to realise the company's assets for the benefit of its creditors.

A company in liquidation appealed against a decision that its claim against the directors, for breach of fiduciary or statutory duty in relation to distribution in specie of the claimant company’s shareholding in another company, was time-barred.

Counterparties of Swiber Holdings Limited ("Swiber") and its group companies would do well to keep a close tab on any debts outstanding from the group.

Swiber, an SGX-listed company in the oil fields services sector, issued an announcement in the early hours of Thursday 28 July 2016 stating that it filed an application in the Singapore High Court for a voluntary winding up on Wednesday afternoon, together with an application to place the company under provisional liquidation.

The true effects of the events of the last few days have yet to be seen. With the mainstream political parties acting like participants in a ‘Compose a Greek Tragedy’ competition, a government unlikely to exercise any meaningful executive functions until autumn (at least), the currency and financial markets in turmoil and the future uncertain on a range of factors, it is tempting to succumb to a condition of inaction whilst waiting to see how the cards fall.

The current litigation landscape for professionals in Hong Kong is relatively benign: but is this the lull before the storm? Accurate records are kept of all actions commenced in the Hong Kong High Court, which deals with claims of over HK$1 million. The graph above shows the number of claims begun by writ each year over the last 15 years. This data covers all claims, not just those against professionals, but gives an indication of the general litigation trends.

Overview

The IMF, in a January 2016 update to its World Economic Outlook, revised its global growth projections for 2016 and 2017 down by 0.2%, citing a decline in emerging markets' growth and lower prices for energy and other commodities.^[1]

With the trough in the global economy set to continue, there is unlikely to be any respite for the marine and trade industries, where counterparty insolvency will become more prevalent. 

An important part of last year's package of amendments to the Corporations Act 2001 (Cth) were the ipso facto reforms which will stay the exercise of certain contractual rights relating to a counterparty's insolvency or financial position. What, if any, contracts would be exempt from the stay has been a major question, not least for the construction industry.

This has now been answered, with the release of exposure drafts for public comment by May 11 2018 of the:

It is important for a receiver or voluntary administrator to ensure that a proper sales process is undertaken relevant to the circumstances as there is no "one-size-fits-all" approach.

Stakeholders have until 11 May 2018 to comment on a key part of the new ipso facto regime – the exceptions to the statutory stay on ipso facto clauses in certain categories of contracts and rights.

The new insolvency legislation commencing 1 July 2018 (Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Act 2017) introduces a statutory stay on the exercise of contractual rights arising by reason of certain insolvency trigger events.

Externally-administered companies will have 24 months to comply with financial reporting and AGM obligations, if ASIC's proposal goes ahead.

ASIC relief defers obligations to lodge financial reports and hold annual general meetings for companies in external administration by 6 months. Companies in liquidation (other than AFS licensees) do not have to comply with financial reporting or AGM obligations at all.