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Foreign creditors get more say under new Hong Kong – mainland China insolvency arrangement
09 July 2021
A new era has been ushered in following the arrangement on the mutual recognition of, and assistance with, insolvency-related proceedings and restructurings between Hong Kong and mainland China.
A new era has been ushered in following the arrangement on the mutual recognition of, and assistance with, insolvency-related proceedings and restructurings between Hong Kong and mainland China. Going forward, creditors of Chinese entities seeking recoveries from assets located in Hong Kong or creditors of companies operating in Hong Kong with assets in mainland China may, at last, have a seat at the negotiating table.
In the latest in our series Investing in China: Legal and Regulatory Update, we take an in-depth look at the arrangement including:
Recognition of Hong Kong insolvency proceedings in the mainland and the provision of assistance including:
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The application process.
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The COMI test.
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When recognition and assistance may be refused.
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Powers and authority of a recognized Hong Kong liquidator or provisional liquidator over assets in the mainland.
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Preferential claims under the PRC Insolvency Law.
Recognition of mainland insolvency proceedings in Hong Kong including:
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The application process.
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The relevant test.
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Powers and authority of a recognized mainland insolvency administrator.
Authored by Jonathan Leitch, Andrew McGinty, James Wood, Yolanda Lau, Shantay Cong, Weiying Zhang, and Nigel Sharman.
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