Einleitung

In a first in Hong Kong, the Companies Court has recently sanctioned a creditors' scheme of arrangement proposed by a Bermuda-incorporated, Hong Kong-listed company by approving an alternative process pursued by the company and its provisional liquidators so as to overcome the constraints in Re Legend International Resorts Ltd [2006] 2 HKLRD 192; that in Hong Kong, provisional liquidators cannot be appointed for the sole purpose of restructuring a company.

Artists have long relied on art galleries to sell their works, and artists and galleries frequently use the legal construct of a “consignment” to facilitate the display and sale of art. In a consignment, the gallery does not acquire title to a work. Instead, the artist (the “consignor”) entrusts the work to the consignee—in most cases a gallery or auction house—for the consignee to sell. If and when an artwork is sold, the gallery pays the artist out of the proceeds of the sale.

Summary

Generally with a winding-up petition, if the petitioner is successful in obtaining a winding-up order, the petitioner will have its costs of the  proceedings. If, on the other hand, the petition is dismissed, then the petitioner has been  unsuccessful and it should pay the costs of the proceedings. We explore the Companies Court’s  treatment of costs in three recent decisions below.

From what Assets should a Petitioner have its Costs?

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.

The High Court has sanctioned a scheme of arrangement between a Vietnamese company and certain of its creditors; the first time a Vietnamese company has taken advantage of this restructuring process in England.

Background

The Pensions Regulator (the “Regulator”) has published a statement setting out its approach to the issuing of financial support directions (“FSDs”) in insolvency situations. The statement is designed to calm fears following the decision in the joined Nortel and Lehman cases that the “super priority” of FSDs could have a negative impact on the corporate rescue and lending industries.

Background

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.

The US Court of Appeals for the Seventh Circuit has weighed in on the question of whether a secured creditor’s ability to credit bid—to offset the amount of the creditor’s debt against the purchase price of sale assets rather than bid in cash—is a right guaranteed by statute even in “cramdown” plans of reorganization conducted under Chapter 11 of the Bankruptcy Code. On June 28, 2011, the court ruled in favor of secured creditors with its much anticipated decision in In re River Road Hotel Partners, LLC (River Road).1