News
Bankruptcy
(Amendment) Bill 2003 Corporate Rescue & Insolvent
Trading Bill to be submitted to the Legislative
Council in early 2004
- Companies
Ordinance (Part V) – Winding-up
- Companies
Ordinance (Part X) – Winding-up
of unregistered companies
- Bankruptcy
Ordinance (Cap 6) – Personal
Bankruptcy
Personal
Insolvency procedures
Personal
Bankruptcies
When
a bancruptcy order is made against an individual,
the Official Receiver is responsible for identifying,
taking possession of and protecting assets, and
making any other recoveries.
Individual Voluntary Arrangement
The
Bankruptcy Ordinance provides for an Individual
Voluntary Arrangement (IVA) as an alternative to
bankruptcy. Application for IVA may be made by
a debtor who has a problem with debt repayment;
or by an undischarged bankrupt. It involves application
to the Court for an Interim Order during which
no bankruptcy petition or other legal proceedings
may be taken or continued against the debtor. The
debtor is required to make a repayment proposal
to the creditors which, on approval, is binding
on all creditors.
Corporate
Insolvency procedures
Company
Windings-up (commercial)
When a winding up order is made against a company, the Official Receiver becomes
interim receiver and provisional liquidator.
Role
played by Government
The
role of the Official Receiver’s Office
is to ensure that the Insolvency service it provides
in Hong Kong is of a high quality, on a par with
International Standards and that the legislation
is commensurate with the objective of keeping
Hong Kong to the forefront as a major International
Financial Centre.
Official
Receiver's Office
The
Official Receiver's Office, which is organized
into three main Divisions: Case Management, Legal
Services, Financial Services, has the following
major functions:
- provides insolvency management services when
appointed by the Court and creditors to
act as trustee or as liquidator; realize
assets of insolvent companies and
bankrupts, investigate and agree on creditor's claims; distribute proceeds
- acts as trustee or liquidator of last resort
in small cases
- investigates the affairs of bankrupts, directors
and officers of insolvent companies; report
to the Court on causes of business failures;
take action
on prosecuting persons for insolvency offences
- monitors the conduct of private insolvency
practitioners, invest funds, audit accounts
and investigate complaints against liquidators
and trustees
- reviews and propose changes to laws, policies
and procedures relating to insolvency
issues, and liaise with international
insolvency
agencies
- provides support to other Government Departments
and statutory bodies involved in insolvency
matters
Role
played by private sector practitioners
Private
Insolvency Practitioners (PIPs) conduct the administration
of all corporate Insolvencies in Hong Kong, the
administration of Individual Voluntary Arrangements
provided for under the Bankruptcy Ordinance and
an increasing number of trusteeships in Bankruptcy.
In
cases involving more than $200,000 of assets,
creditors and contributories may decide to appoint
a suitably qualified person from the private
sector as trustee or liquidator to deal with
the realization of assets and distribution of
funds.
Role
played by the Court
The
court oversees the conduct of the administration
of all Insolvency matters in Hong Kong.
The
High Court, which is part of Hong Kong's Supreme
Court, exercises jurisdiction on bankruptcy and
company winding-up cases.
Does
the insolvency system in Hong
Kong allow
for:
1.
|
Different
procedures for the insolvency of individuals
and the insolvency of companies? |
|
|
2.
|
Creditors
to accept an arrangement outside of formal
bankruptcy/liquidation proceedings? |
|
|
3.
|
Priority
payment for employee creditors? |
|
|
4.
|
Priority
payment for taxation debts? |
|
|
5.
|
Automatic
disqualification of directors of failed companies
from managing other companies? |
|
|
6.
|
Recognition
of insolvency proceedings being conducted
in another jurisdiction? |
|
|
7.
|
A
government agency to undertake insolvency
administration work? |
|
|
8.
|
Some
form of licensing of private sector practitioners? |
|
|
9.
|
A
review of the remuneration claimed by an
insolvency practitioner by either a court
or other government regulator? |
|
|
10.
|
A
mandatory scale of fees applicable to insolvency
practitioner remuneration? |
|
|
11.
|
Surveillance
of the work of private sector practitioners
by a government regulator? |
|
|
12.
|
Collation
of insolvency statistics by a government
regulator? |
|
|
|
