The Asian financial crisis of the 1990’s highlighted the need for a statutory corporate rescue mechanism to be implemented in Hong Kong. As a result, The Companies (Amendment) Bill was introduced in January 2000 proposing Provisional Supervision, allowing a company to appoint an insolvency specialist to take over its affairs without resorting to a court-supervised procedure. The provisional supervisor’s job would be to facilitate a plan for rescuing the Company or part of its business for approval by the company’s creditors. The Bill, however, met with serious opposition and the provisional supervision proposals were dropped.
A modified provisional supervision bill, also containing provisions relating to insolvent trading, is expected to be back on the legislative agenda within the next year.
The following articles define the plan and look at the various pros and cons.