“Since the court resumed hearings in May [2020] more than half the petitions I have heard have involved listed companies. Remarkably petitions to wind-up Hong Kong incorporated companies operating domestic businesses are currently a minority. In addition I have received weekly applications for recognition and assistance by soft-touch provisional liquidators of companies incorporated in one of the offshore jurisdictions and listed here intending to use the Z-Obee technique …”

This week’s TGIF considers a recent case where the Supreme Court of Queensland rejected a director’s application to access an executory contract of sale entered into by receivers and managers on the basis it was not a ‘financial record’

Key Takeaways

Suppliers and subcontractors in the construction industry should be mindful of a recent unreported decision of the Ontario Superior Court of Justice. In Carillion Canada Inc. (Re), the Court held that an automatic cash sweep of Carillion’s Ontario bank account rid the funds of their trust character leaving Carillion’s subcontractors in Canada with no proprietary claim to $22 million sitting in an overseas bank account maintained with a global bank (the “Bank”).

On May 11, 2021, the Supreme People’s Court issued the Opinion on Developing the Pilot for Recognition of and Assistance in Bankruptcy Proceedings in the Hong Kong Special Administrative Region (the “Pilot Opinion”). The Pilot Opinion designated the people’s courts in Shanghai, Xiamen of Fujian Province, and Shenzhen of Guangdong Province to carry out the work for the pilot recognition of and assistance in bankruptcy proceedings in Hong Kong.

2021年4月28日，最高人民法院為堅決貫徹黨中央的決策部署，立足司法審判職能，採取切實有效措施推動破產案件依法公平高效審理，助力市場主體救治和出清，服務經濟高品質發展，構建市場化、法治化、國際化營商環境，公開發佈具有代表性的破產案例。這些案例體現了我國破產制度在以下四個方面的效能：（1）促進實現資源優化配置，注重維持企業持續經營能力；（2）充分保障債權人在重大財產處分中的決策權，提升債權人的程式參與度；（3）充分尊重債權人意見，保障債權人對管理人的推薦權和更換權；（4）適用重整計畫草案表決新機制，權益未受調整或影響的債權人不參與表決。以下僅摘要介紹案例1「重慶市華源天然氣有限責任公司破產重整案」的具體內容：

On 20 July 2021, the Hong Kong Court of First Instance granted an application by Hong Kong liquidators to issue a letter of request for assistance to the Shenzhen Intermediate People’s Court. This was the first application made under the new cross-border cooperation mechanism, which we reported in a previous note (click here).

Background

Good faith, honesty, and transparency are the watchwords of Canada’s insolvency regimes. Where a debtor makes a proposal under the Bankruptcy and Insolvency Act (the “BIA”), but the Court finds that instead of acting in good faith it engaged in self-interested behavior designed to benefit other members of a corporate group, the Court will uphold the BIA’s principles and refuse to sanction the proposal.

Madoff

In the groundbreaking recent decision in Re Samson Paper Company Limited (in Creditors’ Voluntary Liquidation) [2021] HKCFI 2151 (“Samson”), the Hong Kong Companies Court (the “Hong Kong court”) has for the first time issued a letter of request to a court in mainland China under the new cross-border mutual recognition, assistance and cooperation arrangement between Hong Kong and mainland China (the “Mainland”) in relation to corporate insolvency and restructuring matters (the “Cooperation Arrangement”), which took effect on May 14, 2021.

In In re Arcapita Bank B.S.C., 2021 WL 1603608 (Bankr. S.D.N.Y. Apr. 23, 2021), the U.S. Bankruptcy Court for the Southern District of New York addressed the interaction between purported setoff rights arising under investment agreements governed by Islamic law and the Bankruptcy Code's safe harbors protecting the exercise of non-debtors' rights under financial contracts.