Construction Industry Failure in Hong Kong and how to Avoid the Worst.
In Hong Kong, the majority of companies in the construction industry which fail tend to be contractors. It is extremely rare for a developer to fail and indeed it is infrequent that a main contractor will fail. However, the nature of the construction industry [...]

In essence, a scheme of arrangement is a Court supervised agreement between a company and its creditors whereby the creditors will generally agree to accept less than they are entitled to in full and final settlement of their claims against the company. In Hong Kong, in recent years, it has become common practice for schemes [...]

In broad terms, the novation of a contract is a tripartite agreement usually between the employer, the insolvent sub-contractor and the third party who wishes to take on the contract. As a consequence of the novation, the insolvent sub-contractor is relieved of any further responsibility or liability in respect of the contract, the employer agrees [...]

What happens in a Liquidation
Unfortunately, often due to directors not taking action on a timely basis, companies do fail. It is when this happens that the liquidator’s difficulties start. He is often faced with conflicting claims to assets which he has to resolve to his satisfaction. Moreover, he has to report eventually to the Court [...]

One of the principle roles of a liquidator, as well as realising the assets of the company and distributing them to the creditors, is to investigate the reasons why the company has failed.
Indeed, these investigations can often give rise to additional recoveries for the benefit of the company’s creditors.
However, it is frequently the [...]