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Bank's obligations to give foreign insolvency officeholders access to information and assets - a clear distinction

 

20 February 2018

On 7 February 2018, the Court of First Instance (CFI) published reasons for its decision in China Lumena New Materials Corp

Justice Harris reaffirmed his earlier decision and held that where foreign insolvency officeholders are appointed by the court in the country of incorporation of the company, their ability to obtain documents relating to the company’s bank accounts located in Hong Kong is generally not dependent on getting a prior Hong Kong court order. However, if they would like to deal with assets located in Hong Kong, they should obtain a prior Hong Kong court order. This decision is aligned with the established practice in Hong Kong and clarifies the stance that banks should take when faced with requests by foreign insolvency officeholders for information or to transfer account balances. 

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1. The Joint Provisional Liquidators of China Lumena New Materials Corp (In Provisional Liquidation) (HCMP 494 of 2017) [2018] HKCFI 276

2. Bay Capital Asia Fund, LP v DBS Bank (Hong Kong) Ltd [2016] HKEC 2377


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