R&I update – July 2021 – 6 / 6 观点
The Hong Kong government will introduce a long-awaited statutory corporate rescue procedure (CRP) in 2021, bringing the regime more in line with international practice in jurisdictions such as the UK and the USA.
The current lack of a CRP in Hong Kong means that there are limited options available to distressed companies and the lack of a moratorium on creditor enforcement jeopardises legitimate restructuring efforts. The Companies (Corporate Rescue) Bill is timely given the difficulties brought by the current economic downturn, itself exacerbated by the impact of COVID-19.
The Bill introduces a new provisional supervision procedure during which there will be a moratorium on civil proceedings against a distressed company.
Commencement of provisional supervision will unfold as follows:
During provisional supervision (proposed to be 45 business days), a PS will:
At the end of provisional supervision:
To discuss the Companies (Corporate Rescue) Bill in more detail, please reach out to a member of our Restructuring & Insolvency team.