This client briefing discusses a Court of Final Appeal’s decision concerning the application of section 182 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance.

A new cooperation arrangement for mutual recognition of and assistance to cross-border corporate insolvency and debt restructuring proceedings has been established between Mainland China and Hong Kong (the Cooperation Arrangement).

The Cooperation Arrangement is provided in a Record of Meeting on Mutual Recognition of and Assistance to Bankruptcy (Insolvency) proceedings between the Courts of the Mainland and of the Hong Kong Special Administrative Region (the ROM) signed by the Mainland’s Supreme People's Court (SPC) and Hong Kong’s Department of Justice on 14 May 2021.

根据普通法和信托概念，必须要区分(1)受托人持有的信托资产的法定所有权和(2)受益人持有的信托资产的衡平法权益（即享有信托资产收益的权利）。

委托人可在生前设立家族信托，也可以在遗嘱中设立(也称为“遗嘱信托”)。在后一种情况下，信托在委托人去世时生效，转移给信托的资产是遗嘱中指定的资产。

此外，家族信托还可以分为固定信托或全权信托。固定信托按预定比例向特定受益人提供利益。在全权信托下，受益人通常被描述在一个类别内（即受益人不固定），受托人可以决定在受益人之间分配的金额。

优点

信托中的资产无须一次性转移给任何受益人。信托可以设定分配条件（资产或资产产生的收入），以保护弱势受益人。如果他们过早以自己的名义获得资产，可能会做出不明智的支出决定。信托还可以为将来的目的预留资金，如委托人后代的教育支出或需要长期医疗或特殊护理的家族成员的费用。

全权信托允许在确定受益人方面有一定的灵活性，例如将信托设立时委托人尚未出生的子女包括在内，排除后代的配偶等。

The Hong Kong government will introduce a long-awaited statutory corporate rescue procedure (CRP) in 2021, bringing the regime more in line with international practice in jurisdictions such as the UK and the USA.

The current lack of a CRP in Hong Kong means that there are limited options available to distressed companies and the lack of a moratorium on creditor enforcement jeopardises legitimate restructuring efforts. The Companies (Corporate Rescue) Bill is timely given the difficulties brought by the current economic downturn, itself exacerbated by the impact of COVID-19.

In brief

On 14 May 2021, the Supreme People’s Court (SPC) and the Hong Kong government agreed a framework (“Framework”) for judicial cooperation in corporate insolvency and debt restructuring. Under the Framework:

The trust assets could be protected from seizure by creditors if the settlor subsequently becomes bankrupt.

As wealth management and family offices are attracting more attention, Hong Kong has become a popular place to set up trusts for families, especially those from mainland China. This article explains how a trust works and why it may benefit a family.

This article debunks the myths surrounding court-sanctioned winding-up in Hong Kong and lays out the process clearly, so you know what to expect.

The term “winding-up” refers to the sale of a company’s assets to settle its debts and distribute the surplus (if any) to its shareholders. Once this process is complete, the company is dissolved.

The Hong Kong government will introduce a long-awaited statutory corporate rescue procedure (CRP) in 2021, bringing the regime more in line with international practice in jurisdictions such as the UK and the USA.

The current lack of a CRP in Hong Kong means that there are limited options available to distressed companies and the lack of a moratorium on creditor enforcement jeopardises legitimate restructuring efforts. The Companies (Corporate Rescue) Bill is timely given the difficulties brought by the current economic downturn, itself exacerbated by the impact of COVID-19.

Introduction

In Re Freeman FinTech Corporation Ltd [2021] HKCFI 310, the Hong Kong court sanctioned a scheme of arrangement in respect of a debt restructuring in which the governing law of part of the debt was not Hong Kong law and the creditor to whom this debt was owed did not submit to the jurisdiction of the Hong Kong court. In this article, we discuss the background and rationale for the decision and provide some observations on what the decision may mean for future debt restructurings.