We recently wrote about the New Arrangement for mutual recognition of insolvency processes between certain pilot areas in the Mainland (i.e. Shanxi, Xiamen and Shenzhen) and Hong Kong (New Arrangement).

In this edition of the Going concerns, our Stephenson Harwood restructuring and insolvency team provides a brief update on the newest developments in Singapore, UK and Hong Kong. For Singapore, we update on the "conflict" between the admiralty and insolvency regimes while our London team provides an update on the cutting-edge Part 26A restructuring plans. Last but certainly not least, our Hong Kong team dissects and discusses the significance and impact of the new cooperation mechanism for Hong Kong liquidators and Mainland administrators to seek mutual recognition and assistance.

Slotine explains the nuts and bolts of the two routes towards closing down a solvent company in Hong Kong: members’ voluntary winding-up and deregistration.

导言

Introduction

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: