Hong Kong 2003
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Bankruptcies, Individual Voluntary Arrangement and Compulsory Winding-up

The Official Receiver's Office administers the estates of individuals adjudged to be bankrupt by the court. The estates of companies ordered to be wound up by the court are administrated by insolvency practitioners from the private sector.

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

When acting as the trustee or liquidator, the Official Receiver or the insolvency practitioner appointed by him 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 and Companies Ordinances, applies for disqualification orders against unfit company directors, supervises the work of outside liquidators and trustees, and monitors the funds held by liquidators in both compulsory and voluntary liquidations.

During the year, the court made 24 922 bankruptcy orders, 2 743 interim orders in individual voluntary arrangements and 1 248 winding-up orders. The assets realised by the Official Receiver during 2003 amounted to $136.4 million, while $115.9 million in dividends was paid to creditors in 1 690 insolvency cases. There were 1 207cases assigned under the scheme for contracting out of summary winding-up cases.

The Companies (Corporate Rescue) Bill, which was introduced into the Legislative Council in May 2001, aims to put in place a statutory corporate rescue procedure for companies in financial difficulty. The Legislative Council has set up a Bills Committee to examine the bill. In the light of the comments expressed by the Bills Committee, the Government has conducted a further round of consultation with concerned parties and is considering possible changes to certain provisions in the bill.

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