Naomi Moore Quoted by Global Restructuring Review on Hong Kong, China Restructuring Landscape

Akin Gump Hong Kong financial restructuring partner Naomi Moore was quoted by Global Restructuring Review for “Changes, hopes and fears: China and Hong Kong Worked Out,” a series of articles covering Hong Kong, China and restructuring in the region. In the series “Names to know in Hong Kong and China,” she is listed as having a “wonderful reputation,” often acting for bondholders, and noted for having worked in a number of restructurings with a Singapore connection, including Noble Group, Hyflux and CW Group. (Learn about recognitions of Akin Gump’s work on Noble and other matters here.)

Commenting on China’s $1 trillion plan to connect itself to South-East Asia, the Persian Gulf, Northern Africa and Eastern Europe through new roads, rail and shipping, Moore noted that the plan may create more opportunities in finance and arbitration but suspects only time will tell whether it will produce more distressed opportunities.

Regarding the importance for Hong Kong of greater ease in assisting foreign insolvency proceedings, Moore said, “In virtually every case you’re dealing with an offshore company, it might have issued foreign law-governed debt, and have assets in various jurisdictions so there is a necessity for cross-border cooperation. There will be more of it as we see more distress in Asia – it’s therefore quite important that we have a statutory framework as soon as possible, so that we can have certainty and predictability.”

She said that there has been progress in this area through case law, even given the absence of formal legislative moves, but noted that case law has its limits, and evolution through case law is time-consuming: “You can’t always control the timing, you’ve got to wait for the next relevant case to come up, and then try to persuade the court to develop the law. That is not a satisfactory position for debtors to be in when they have complex cross-border issues to solve with limited time available. What they need is certainty of outcome.”

Concerning the absence of a restructuring and insolvency regime in Hong Kong, she discussed a proposed law scheduled to be introduced later this year that would create a moratorium procedure, would seek to encourage out-of-court restructurings and would introduce an insolvent trading regime. Moore said insolvent trading measure would ensure directors don’t “bury their heads in the sand too much” to creditors’ disadvantage, but she also stressed that a balance is important: “If they’re too strict, you can end up with formal insolvency filings much earlier than necessary, which can hinder optionality and adversely impact value.”