Mourant Ozannes successfully obtains orders recognising the appointments of Hong Kong joint provisional liquidators over a Cayman Islands Company in the Cayman Islands
20 March 2018
In the first such application of its kind, Mourant Ozannes successfully obtained orders recognising the appointments of Hong Kong joint provisional liquidators (HKJPLs) in the Cayman Islands to facilitate the restructuring of Changgang Dunxin Enterprise Company Limited (Changgang), a company incorporated in the Cayman Islands and registered in Hong Kong.
The application was precipitated by a lacuna in Hong Kong laws which do not permit the appointment of provisional liquidators1 solely for the purposes of restructuring a debtor company. By contrast, the regime in the Cayman Islands enables the appointment of provisional liquidators for such purposes and may vest broad powers in them, including the power to promote a scheme of arrangement as part of a wider restructuring.
This landmark decision, which recognised the HKJPLs' power and authority to apply to the Cayman Islands court for the winding up of Changgang and to seek their own appointments as joint provisional liquidators under Cayman Islands law, has enabled the HKJPLs, and Changgang, to navigate the limitations under Hong Kong jurisprudence.
Following recognition, on 12 March 2018 the HKJPLs, together with a Cayman Islands domiciled insolvency practitioner2, were appointed as Changgang's joint provisional liquidators by the Cayman Islands court.
Mourant Ozannes Hong Kong Partner, Shaun Folpp, who led the matter said: "Although this has been a longer process than if the proceedings has been commenced in the Cayman Islands at the outset, our Cayman and Hong Kong litigation team has provided seamless advice to ensure a sensible and pragmatic solution, paving the way to effect a restructuring which is in the best interests of all stakeholders."
For more information on the recognition proceedings, read the full update here.
1 - The HKJPLS are Kennic Lai Hang LUI and LAU WU Kwai King Lauren of KLC Corporate Advisory & Recovery Limited
2 - The Cayman Islands domiciled insolvency practitioner is Martin Trott of Rawlinson Hunter