Bankruptcy Information, Individual Voluntary Arrangement (IVA), Winding-up of Companies
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Bankruptcy, Individual Voluntary Arrangement & Winding-up of Companies
SELECT SUBTOPIC
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Individual Bankruptcy
- A. Brief introduction of bankruptcy proceedings
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B. Q&A
- 1. Bankruptcy proceedings can only be commenced by creditors but not by the debtors. Is this true?
- 2. What are the main functions of the Official Receiver's Office?
- 3. Can I find out the bankruptcy record of any persons from the Official Receiver's Office?
- 4. What are the consequences of bankruptcy?
- 5. Is the bankrupt required to hand over all of his/her income to the Trustee?
- 6. What should a bankrupt do or avoid doing after the granting of a bankruptcy order?
- 7. What can the creditors do after the granting of bankruptcy order?
- 8. What is the order of payment after the bankruptcy’s assets are sold?
- 9. Can I institute bankruptcy proceedings against my employer for unpaid wages?
- 10. When will the bankrupt be discharged from the bankruptcy order? Will the bankrupt still be liable for the debts after the discharge of the bankruptcy order?
- 11. What criminal offences are related to bankruptcy?
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C. Case Illustration
- 1. Can ABC Bank file a bankruptcy petition against Mr. T at this stage?
- 2. What can ABC Bank do if the statutory demand fails to reach Mr. T, or if Mr. T tries to avoid receiving the demand?
- 3. Apart from validly serving the statutory demand on Mr. T, what other conditions must be satisfied before ABC Bank can file a bankruptcy petition?
- 4. During the court hearing for the bankruptcy petition, Mr. T said that he had spent a long period in mainland China and had not received the statutory demand. He only received the bankruptcy petition two days before the hearing. Can he ask the Court to suspend or dismiss the bankruptcy proceedings?
- 5. If a bankruptcy order is granted against Mr. T, then what will happen to Mr. T?
- 6. What are the effects of bankruptcy on Mr. T's job?
- 7. If Mr. T absconds to China and takes $100,000 in cash, then what possible legal action will he face?
- 8. If Mr. T gives his car to his brother as a gift, then what possible legal action will he face?
- 9. What can ABC Bank do after a bankruptcy order has been granted against Mr. T?
- 10. When will Mr. T be discharged from his bankruptcy order?
- 11. Can Mr. T apply for an early discharge of the bankruptcy order even if its effective period has not expired?
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Individual Voluntary Arrangement
- 1. If a debtor does not want to be bankrupt, then is there any alternative solution?
- 2. What are the advantages of an IVA?(With a brief procedural guide for applying for an IVA)
- 3. What should be stated on the IVA proposal?
- 4. What are the consequences for the debtor if the IVA proposal is approved?
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5. Case Illustration
- 1. What makes an IVA better than bankruptcy in Miss M's case?
- 2. What should Miss M do during the IVA application?
- 3. What should be stated on Miss M's IVA proposal?
- 4. What will happen during the creditors' meeting?
- 5. What are the consequences for Miss M if her proposal is approved?
- 6. Can the decision made at the creditors' meeting be challenged?
- 7. Can Miss M avoid bankruptcy proceedings against her during the effective period of the IVA proposal?
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Winding-up of Companies
- A. What kind of companies can be wound-up?
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B. Things you need to note before presenting a winding-up petitionyou need to note before presenting a winding-up petition
- 1. A brief summary of the procedures for presenting a winding-up petition
- 2. What should the petition contain?
- 3. I have already obtained a court judgment against a limited company, but the company still refuses to pay. Should I present a winding-up petition?
- 4. Apart from a creditor, who else can present a winding-up petition?
- 5. I am a director and minority shareholder of a company. The majority shareholders of the company have continued to exclude me from the management of the company. Can I present a winding-up petition?
- 6. I just found out that another creditor has already presented a petition against the company. Should I nevertheless present another petition? If not, what are my options?
- 7. My company has received a written demand from an alleged creditor requiring us to pay them within 21 days. We strenuously deny that our company is indebted to the alleged creditor. Is there anything our company can do to protect its interest?
- 8. We have written to the creditor who served a written demand on us asking him to withdraw the demand but there is no reply from him. 21 days have passed and we fear that a petition may be presented at any moment. What are the company's options?
- C. Search of winding-up records
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D. Consequences of the presentation of a winding-up petition
- 1. Can anything be done to reactivate the company’s bank account?
- 2. The Company is of the view that the debt allegedly owned to the petitioner is not genuine. Is there anything else the company can do pending the hearing of the winding-up petition?
- 3. I am a creditor of a company which has refused to repay a debt to me. I also have grounds to believe that the assets of the company are in jeopardy and are being dissipated. I know I can present a winding-up petition but it will take a few months before the company can be wound up. What can I do to protect my interest and to safeguard the company’s assets in the meantime?
- 4. Do I need to ask my own lawyer/accountant to be appointed as the provisional liquidator? Can a government official (e.g. the Official Receiver) act as the provisional liquidator so that I do not need to pay for my own lawyer/accountant to act as the provisional liquidator?
- E. Alternatives to winding-up
- F. Voluntary winding-up by the company itself
- G. Grounds for making a winding-up order
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H. Consequences of making a winding-up order
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1. On the legal proceedings related to the company, debtors of the company or liquidators
- 1. I am the defendant of a legal action brought against me by a company. I just discovered that a winding up order has been made against this company. Does it follow that the action against me will come to an end automatically?
- 2. I owe a substantial amount of money to a company that has just been wound up. Does it follow that I do not have to repay the debt?
- 3. What are the powers of liquidators when a company is wound up by the Court?
- 4. What are the powers of the Court under section 286B of the Companies Ordinance?
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2. On creditors or employees of the company
- 1. From somewhere I have heard about a "summary procedure" for winding up a company having assets of less than $200,000 in value. How does this procedure work?
- 2. I am an employee of a company that has just been wound-up. Can I recover my unpaid wages?
- 3. I am a creditor of a company that has been wound up. Can I do anything to recover the debt?
- 4. I am dissatisfied with the liquidator’s decision in respect of a proof of debt filed by me. For example, the liquidator denied that the company owes me a certain amount of money. Can I appeal against the decision?
- 5. The company borrowed a substantial amount of money from me but it is not repayable until next year under the terms of the loan. Now that the company has been wound up, can I recover the debt immediately?
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3. On shareholders or directors of the company
- 1. I am a shareholder of a company in which a winding-up order has been granted. I have decided to pay off all debts of the company. Can I “revive” the company?
- 2. After the making of a winding-up order, what are my duties (as a director of the company) in relation to the winding-up proceedings?
- 3. As a director of the company, I have just received a court order directing me to attend a public examination. Do I have to attend? What happens at the hearing?
- 4. If I am a director of a company being wound up, will the winding-up procedures have any practical impact on my personal life?
- 5. I became a “nominee” director of a company controlled by my employer only because my employer asked me to do so. I was not involved in the operation and the management of that company, and it is now being wound up. Do I need to bear any liability in this regard?
- 6. My company is in heavy debt. Some creditors have threatened to present a winding-up petition. I have therefore transferred all the company’s assets to my wife. A petition was presented 2 months after the transfer, and a winding-up order was eventually made. Can anyone go after my wife for the assets?
- 7. Further to the above question, what if I only arrange payment to one of the creditors immediately before the commencement of winding-up proceedings?
- 4. Priority of distribution of assets
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1. On the legal proceedings related to the company, debtors of the company or liquidators
- I. Conclusion of winding-up
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J. Case Illustration
- 1. Can Mr. C file a winding-up petition against AZ Company at this stage?
- 2. There is still no reply from AZ Company, even after it received the written demand. Can Mr. C proceed to file a winding-up petition in Court?
- 3. In addition to delivering the winding-up petition to all relevant parties, must Mr. C also advertise the petition in newspapers?
- 4. Mr. C knows that AZ Company’s bank account will be frozen after the presentation of a winding-up petition against it, but he is still afraid that the company’s assets may be dissipated in other ways. What should he do?
- 5. After the presentation of a winding-up petition, AZ Company is trying to raise money to pay off its debts. The company has shown some written evidence to the Court and its creditors regarding such effort. Can the company apply to the Court for dismissing Mr. C’s petition?
- 6. A winding-up order is finally granted by the Court against AZ Company. What should Mr. C do in order to secure his rights on recovering the debt?
- 7. Will the shareholders of AZ Company be personally liable for the debt of the company when their company is wound-up?
- 8. What should the directors of AZ Company do after the making of a winding-up order?
- 9. When will the winding-up process be completed?
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