As we pointed out in our Legal Update of 30 January 2014 ("New Companies Ordinance – Old Winding Up and Insolvency Regime"), the new Companies Ordinance for Hong Kong (Chapter 622) is scheduled to take effect from 3 March 2014 but it will not cover the winding-up and insolvency regime.

In The Joint and Several Liquidators of QQ Club Limited (in liquidation) v. Golden Year Limited (HCCW 245/2011, 9 April 2013) (QQ Club), the Court of First Instance held that a liquidator's costs in pursuing an avoidance claim are "fees and expenses properly incurred in preserving, realizing or getting in the assets", and are payable out of the company's assets in priority to all other payments prescribed in rule 179 of the Companies (Winding-up) Rules. In reaching this conclusion, the court distinguished the English Court of Appeal's decision in Lewis v.

The case of Lau Siu Hung and Another v Krzysztof Marszalek and Another [2013] HKEC 936 appears to be the first authority in Hong Kong on the effect an annulment of a bankruptcy order has on debts which remain unproven when an annulment order is made.  On 17 June 2013, the Court of First Instance held that an annulment of bankruptcy cannot prohibit a creditor, who has not proved his debts before, to obtain relief from the court after the annu

In the recent case of Lau Siu Hung v. Krzystof Marszalek (HCCW 484/2009, 17 June 2013) the Court of First Instance held that an annulment of bankruptcy does not debar a creditor, who has not proved his provable debt, from asserting his claim after the annulment.

Procedural Background

The Court of First Instance in Hong Kong recently provided a timely reminder that the jurisdiction to wind up a foreign company is an exorbitant one and therefore winding up petitions and applications for leave to serve them out of the Hong Kong jurisdiction must be properly thought through and drafted before the Court will consider giving leave to serve out, and they may be liable to be struck out entirely if not.

Did you know...

it has been argued that a factoring arrangement over invoices of a company could be challenged as a charge over book debts and thus is void against liquidators of the company unless registered under section 80 of the Companies Ordinance.

As many will know, a failure to “...do all that is reasonable for the purpose of bringing the statutory demand to the debtor’s attention...” may result in an annulment of a bankruptcy order. But how is this requirement of Rule 46 of the Bankruptcy Rules met?

Did you know... that the court may, in special circumstances, exercise its discretion to appoint pre-existing receivers as a company’s provisional liquidators.

In the recent decision ofRe K Vision International Investment (Hong Kong) Limited, the Honourable Mr. Justice Barma confirmed that, where the circumstances require it, the court will exercise its discretion to appoint pre-existing receivers of a company’s assets as that company’s provisional liquidators provided that potential conflicts of interest are identified and appropriately addressed.

DID YOU KNOW...that interim fees incurred by provisional liquidators (including agents’ fees), previously thought to have been payable from the funds of an insolvent estate without formal taxation, are now required to be taxed.

Summary