Insolvency & Restructuring

Overview

Through our Insolvency and Restructuring practice, we advise on Hong Kong insolvency laws and assist clients in developing and implementing restructuring plans.

On the insolvency side, our lawyers advise on corporate bankruptcy, compulsory liquidation, voluntary winding up, insolvency proceedings and the liquidation process, the appointment and powers of liquidators and receivers, as well as the enforcement of security and debt covenants.

On the restructuring side, our restructuring team advises on corporate rescues and corporate turnarounds, including debt restructuring, company restructuring, schemes of arrangement, contractual workouts, the enforcement and sale of security and provisional liquidation.

Our clients have included Fortune Global 1000 companies, operators and participants of leading financial and commodities exchanges in Hong Kong and abroad, banks, private equity, hedge funds, corporations and private businesses. We represent lenders, bond and debenture holders, creditors (both secured and unsecured), borrowers, debtors, shareholders and directors and assist them in navigating the complexities of Hong Kong’s insolvency laws.

Our work includes advising on the following:

• Compulsory liquidation, including the procedures for winding up a company, the disposition of property after the commencement of winding-up and applications for validation orders, the appointment, powers and duties of liquidators and provisional liquidators, the composition, role and powers of a committee of inspection, the conduct of creditor meetings and examinations of directors, the distribution of liquidation dividends, the rights of creditors and contributories (shareholders), the release of liquidators, the dissolution and de-registration of companies and the re-instatement of dissolved companies

• Voluntary liquidation, including members’ voluntary winding-up and creditors’ voluntary winding-up

• Enforcement of security, including the nature, validity and enforceability of security interests, the priority of security holders, the appointment, powers and duties of receivers in enforcing security on behalf of a secured creditor, the sale of secured assets and asset hive-offs

• Directors’ duties & liabilities, including fiduciary duties in the insolvency zone, unfair preference and fraudulent trading, director disqualification, and prosecution of directors and officers for insolvency related offences under the Companies Ordinance (“CO”) and the Companies (Winding Up and Miscellaneous Provisions) Ordinance (“CWUMPO”)

• Corporate restructuring & reorganization, including debt restructuring through voluntary negotiated arrangements or court sanctioned schemes of arrangement, the procedures for pursuing a scheme of arrangement, the requirements for class constitution, approvals and court sanction under the CO, and the possible deployment of a provisional liquidation to create a debt moratorium to pursue a debt restructuring

• Distressed investment management, including the possible options available to hedge funds and private equity funds in managing investments in distressed portfolio companies

Our insolvency and restructuring team has particular experience advising on insolvency issues arising in the context of trading and clearing systems, financial institutions and financial infrastructure. We have advised extensively on the Financial Institutions (Resolutions) Ordinance (“FIRO”).

In addition, we have been involved on behalf of clients in discussions with the Securities and Futures Commission (“SFC”) and the Legislative Council (“LegCo”) to shape statutory insolvency protections for financial market infrastructure.