Mainland Chinese Court Grants First Recognition Order under New Arrangement in Support of Hong Kong Bankruptcy (Insolvency) Proceedings
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- A debtor must have had Hong Kong as its “centre of main interests” continuously for at least six months before an application for recognition is made to the courts in the Mainland under the current regime for mutual recognition of insolvency proceedings between the courts of the Mainland and Hong Kong.
- Under the current regime, a debtor’s “centre of main interests” generally means the place of incorporation of the debtor, and the courts in the Mainland will also take into account other factors including the place of principal office, the principal place of business and the place of principal assets of the debtor in determining whether Hong Kong is the debtor’s “centre of main interests” for the purpose of recognition in the Mainland.
- The significance of the recently published Re Samson Paper Company Limited case is that where a debtor is a holding company incorporated in Hong Kong (or otherwise has its principal office, principal place of business or principal assets in Hong Kong) that has assets or operations in the Mainland, liquidators appointed to the Hong Kong holding company could potentially benefit from the regime by applying to the courts in the Mainland for recognition of their appointment so as to facilitate the discharge of their duties, including managing and disposing of the holding company’s assets in the Mainland.