The New Cross-Border Arrangement Between Hong Kong and Mainland China on Insolvency and Restructuring Matters—A Comparison with Chapter 15 of the U.S. Bankruptcy Code
Journal of Bankruptcy Law has published the article “The New Cross-Border Arrangement Between Hong Kong and Mainland China on Insolvency and Restructuring Matters—A Comparison with Chapter 15 of the U.S. Bankruptcy Code” written by Akin Gump financial restructuring partners Naomi Moore and Abid Qureshi, practice co-head Liz Osborne, litigation consultant Daniel Cohen, financial restructuring counsel Jeremy Haywood and international trade counsel Jingli Jiang. The article, which originated as an Akin Gump client alert, discusses the key features of an historic agreement between Hong Kong and mainland China and compares it to the Chapter 15 process of the U.S. Bankruptcy Code.
According to the authors, the Record of Meeting on Mutual Recognition of and Assistance to Bankruptcy (Insolvency) Proceedings between the Courts of the Mainland and of the Hong Kong Special Administrative Region was signed into law earlier this year—marking the commencement and implementation of cross-border mutual recognition, assistance and cooperation arrangement between Hong Kong and mainland China regarding corporate insolvency and restructuring matters (the “Cooperation Agreement”).
On the significance of this groundbreaking agreement, the authors note that the development, “[…] is the first time that either the Mainland or Hong Kong has entered into a cooperation framework with any other jurisdiction in respect of cross-border insolvency and restructuring matters.”
Additionally, while the Cooperation Arrangement has some limitations relative to Chapter 15, the authors said, “it is an important and positive development for the Hong Kong-China insolvency and restructuring landscape and will give Hong Kong insolvency officeholders an advantage in Chinese group failures that have a sufficient nexus to Hong Kong and one or more of the Pilot Court jurisdictions.”
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