Introduction

Terms of reference

The consultation process

Confidentiality

Abbreviations and other expressions used in this report

Report in English and Chinese

Chapter 1

Overview

Review of the Hong Kong Companies Ordinance

Recommendations / Format of the report

Language of the new Insolvency Ordinance

Chapter 2

A Separate Insolvency Ordinance to Include All Forms of Winding-up, Receivership, Provisional Supervision and Bankruptcy

Receivership and provisional supervision

Members’ (solvent) voluntary winding-up

Disqualification of directors

Procedures should be kept separate within an Insolvency Ordinance

Chapter 3

Licensing of Insolvency Practitioners

Provisional supervision

The “Grandfather” exemption

Training and continuing education

Two practitioners per firm

Indemnity / Bonding

Bankruptcy Ordinance

Chapter 4

Remuneration (Fees) of Office-holders

How office-holders’ fees are treated at present

The Ferris Report

The need to establish a Panel to scrutinise office-holders’ fees

How the Panel would operate / Convenor

The Panel to consider disputes as to fees only in cases referred to it

Who would be on the Panel

Access to the Panel

How the Panel would charge

Panel to be inquisitorial

Chapter 5

The Role and Funding of Official Receiver’s Office

Protection of Wages on Insolvency Fund levy on the business registration fee

Adequate and appropriate funding of the Official Receiver's Office

The need for proper regulation of the winding-up of companies by the Official Receiver's Office

Chapter 6

Renaming of Members’ (Solvent) Voluntary Winding-up and Creditors’ (Insolvent) Voluntary Winding-up

Chapter 7

Minorities

Section 168A

Alternative remedy to winding-up in cases of unfair prejudice

Companies Winding-up proceedings and Miscellaneous proceedings distinguished

Chapter 8

Contributories

Section 170

Liability as contributories of present and past members

Liability of past directors and shareholders

Expanded circumstances where a contributory can present a petition

Section 171

Definition of contributory

Section 173

Contributories in case of death of member

Section 174

Contributories in case of bankruptcy of member

Provision to apply before or after death of bankruptcy

Insolvent companies

Chapter 9

Cases in which Company may be Wound-up by the Court

Section 177

Circumstances in which company may be wound-up court

Regulatory authorities

Section 178

Definition of inability to pay debts

Prescribed form

Presumption of insolvency

Minimum debt amount under section 178(1)(a)

Deeming provisions under section 178(1)

Contingent and prospective liabilities under section 178(1)(c)

Service by e-mail or fax

Assignment of part of a debt

Chapter 10

Petition for Winding-up and Effects thereof and Consequences of Winding-up Order

Section 179

Provisions as to applications for winding-up

Directors to be able to petition to wind-up

Telephone and fax numbers and e-mail addresses to appear on a petition

Advertising the petition in the Hong Kong Government Gazette

Inconsistency between section 179(2) and section 257

Section 180

Powers of court on hearing petition

Contributories

Section 180A

Hearing of unopposed petition by Registrar of High Court

Petition not opposed unless affidavit in opposition filed

Section 181

Power to stay or restrain proceedings against company

Not to apply to section 166

Section 182

Avoidance of dispositions of property, &c. after commencement of winding-up

Lites pendentes in winding-up by court to be registered by Official Receiver

Section 183

Avoidance of attachments, &c.

Section 186

Actions stayed on winding-up order

Section to apply to creditors’ (insolvent) voluntary winding-up

Quasi-judicial actions, quasi-criminal actions and administrative actions

Right to sell quota

Chapter 11

Official Receiver in Winding-up

Section 190

Statement of company’s affairs to be submitted to Official Receiver

Valuation of assets by directors

Costs of preparation of statement of affairs

Extension of date for submission of the statement of affairs

28 days for submission of the statement of affairs

Dispensing with the statement of affairs

Contempt of court

No exemption for non-executive directors in respect of the statement of affairs

Fines and imprisonment

Affidavit of concurrence

Section 191

Report by Official Receiver

Official Receiver to have discretion to file report

No obligation on Official Receiver to investigate if company has not failed

Official Receiver should make investigations where appropriate in all winding-up cases

Chapter 12

Interim Liquidator, Provisional Liquidator and Liquidator

Section 193

Appointment and powers of provisional liquidator

Appointment of provisional liquidator

Specimen powers of provisional liquidators

Right of third parties to appear at the hearing of an application for appointment of a provisional liquidator

Section 194

Appointment, style, &c. of liquidators

Liquidator

Interim liquidator

Liquidator may summon meetings of creditors and contributories

Creditors may require a meeting to be held

Meeting of creditors’ choice of liquidator to prevail

Section 195

Provisions where person other than Official Receiver is appointed liquidator

Section 196

General provisions as to liquidators

Separate provision for resignation, removal and remuneration

Resignation of liquidator

Removal of liquidator

Section 199

Powers of liquidators

Powers which may require sanction

Powers of liquidators to be placed in a schedule

Foreign currencies

Section 200

Exercise and control of liquidator’s power

Disposal of assets of company to members of the committee of inspection

Section 202

Payments of liquidator into bank or Treasury

Section 203

Audit of liquidator’s account

Accounts under section 203 and section 284 distinguished

Summary of accounts

Accounts to be filed with the Registrar of Companies

Confidentiality agreements

Signing accounts by liquidators on conversion of liquidation

Section 204

Control of Official Receiver over liquidators

Section 205

Release of liquidators

Chapter 13

Committee of Inspection

Section 206

Meetings of creditors and contributories to determine whether committee of inspection shall be appointed

Relationship of liquidator and committee of inspection

Role of committee of inspection

Directors should be obliged to attend meetings of creditors

Remuneration of committee of inspection

Resolutions by post

Length of time liquidations can continue

The Securities and Futures Commission

Section 207

Constitution and proceedings of committee of inspection

Committee of inspection to be renamed “Liquidation Committee”

Committee of inspection to act in the best interests of creditors as a whole

Number of members of the committee

Quorum

Body corporate to be a member of the committee

Letters of authority

Meetings only when necessary and agreed

Voting

Section 208

Powers of court where no committee of inspection

Official Receiver to sanction actions of private sector liquidators where no committee of inspection

Chapter 14

General Powers of Court in case of Winding-up by Court

Section 209

Power to stay winding-up

Court to review, rescind or vary any order

Section 209A

Power of court to order winding-up to be conducted as creditors’ voluntary winding-up

Section 209B

Consequences of an order under section 209A

Section 209C

Transitional

Minority view

Majority view

Application of sections 182, 183 and 186 to voluntary windings-up converted from windings-up by the court

Section 210

Settlement of list of contributories and application of assets

Power to settle lists of contributories to be delegated to liquidator

Inclusion in list may result in unpaid capital being called

Objection to entry in or omission from list

Section 211

Delivery of property to liquidator

Provision to extend to voluntary winding-up

Any person may be required to hand over assets

Delivery of property to be extended to provisional supervisors

Information held by auditors

Section 212

Payment of debts due by contributory to company and extent to which set-off allowed

Section 213

Power of court to make calls

Section 214

Payment into bank of moneys due to company

Section 215

Order on contributory conclusive evidence

Section 216

Appointment of special manager

Section 217

Exclusion of creditors not proving in time

Section 219

Inspection of books by creditors and contributories

Provision to apply to all forms of winding-up

Access to information by creditors and contributories

Section 221

Power to summon persons suspected of having property of company

Receivers should not be able to apply under the provision

Self-incrimination

Examination to be extended to voluntary windings-up

Application only by liquidator

Application inter partes unless circumstances demand ex parte application

Examination on matters considered relevant

Legal representation of person to be examined

Inspection of liquidator’s report to the court

Costs may be paid by the person examined