Bankruptcies and Compulsory Winding-up

The Official Receiver's Office administers the estates of individual
bankrupts and companies ordered to be compulsorily wound up by the
Court of First Instance of the High Court.

The Official Receiver becomes the interim receiver of an individual debtor
or provisional liquidator of a company when a receiving order against the
property of the debtor or a winding-up order against the company is made
by the Court of First Instance of the High Court. Where the assets of an
estate do not exceed $200,000, the Official Receiver is appointed trustee
or liquidator by a summary procedure order. In other cases, a meeting of
creditors in bankruptcy or meetings of creditors and contributories in
compulsory liquidation will be convened to decide whether the Official
Receiver or some other fit persons from the private sector should be
appointed trustee or liquidator.

When he acts as trustee or liquidator, the Official Receiver investigates the
affairs of the bankrupt or the wound-up company, realises assets and
distributes dividends to creditors. The Official Receiver also prosecutes
certain offences set out in the Bankruptcy Ordinance and the Companies
Ordinance, applies for disqualification of unfit company directors,
supervises the work of outside liquidators and trustees, and monitors
funds held by liquidators in compulsory and voluntary liquidations.

The Bankruptcy (Amendment) Ordinance 1996 was enacted on December
27, 1996, to come into operation as and when the related amendments to
the bankruptcy subsidiary legislation were finalised. It abolishes the
outdated concept of 'acts of bankruptcy', provides for automatic
discharge for bankrupts after a certain period and for new voluntary
arrangements to encourage debtors to resolve their problems without
having to become bankrupt, and substantially simplifies procedures under
the ordinance.

During the year, the Court of First Instance of the High Court made 639
receiving orders and 503 winding-up orders. Assets realised by the
Official Receiver during 1997 amounted to $79.37 million, while creditors
in 210 insolvency cases received $99.51 million in dividends.

[Back] [Forward]