During the COVID-19 crisis, many companies are facing unexpected financial distress, and taking steps to stabilise their business and bolster their finances.
Many directors will not have experienced these issues before, and should be aware of how their duties are impacted when the company is in financial distress.
This guide has been prepared on the basis of Hong Kong law principles. Many of the principles will also be applicable to other common law jurisdictions.
How are companies responding to the current crisis?
In this edition, now in its 7th year, we review the trends and developments in M&A across a wide range of countries and territories in the Asia Pacific region throughout 2019, and discuss our thoughts on the anticipated market trends for 2020 and beyond.
Asia Pacific M&A in 2019
Key themes across the 2019 Asia Pacific market include:
In high stakes restructurings, directors can be under significant pressure from different parts of the capital structure to take (or refrain from taking) certain actions. It is critical that the board understands whether it owes duties to members or creditors (or both). For such an important issue, the law has previously been remarkably unclear.
Mesa Minerals Ltd was placed into voluntary administration on 13 July 2016 with a holding deed of company amendment (‘DOCA’) entered into on 3 November 2016. The DOCA’s stated objective was to provide sufficient time for the Administrators to conduct further investigations into the course of action in the best interests of the creditors. Clause 8 of the DOCA stated that there was no property available for distribution to creditors.
FINANCE YEAR REVIEW 2017
The biggest news for the loan market in 2017 was the announcement by Andrew Bailey of the FCA that LIBOR may cease to exist beyond 2021. In this briefing, we discuss this and other key legal developments in banking from 2017, and also highlight a few issues to look out for in 2018 and beyond.
1. Key Banking Developments in 2017
2 FEBRUARY 2018
London
Contents
1. Key Banking Developments in 2017
1
The potential discontinuation of LIBOR
Major law changes intended to make Singapore the region’s pre-eminent restructuring and insolvency hub have now come into effect.
On 22 May 2017, the Singapore Ministry of Finance issued a notice that sections 22 to 34, 40, 41, 43, 45, 49, 50, 53(3) and (6) and 54 (the Relevant Sections) of the Companies (Amendment) Act 2017 (the Amendment Act) would come into operation on 23 May 2017.
After a fraught period as an ASX listed company, including the near collapse of iron ore miner and major customer, Atlas Iron, the transport company McAleese Limited has entered voluntary administration.
SUMMARY
In brief
The case of Re Company A-E [2015] HCMP 2019/2015 demonstrates that the Court will take a practical approach in determining whether a funding arrangement infringes upon the common law rules against maintenance and champerty. The Court will consider commercial factors, such as the underlying rationale for the funding arrangement and the commercial character of the funder, alongside its analysis of the common law principles.
The government has today announced that it is scrapping its plans to end the insolvency exception to the Jackson reforms from April this year (as we had reported here).