Wan, W.Y. orcid.org/0000-0003-1747-6788, Mo, P. and McCormack, G. orcid.org/0000-0002-1574-1296 (Cover date: 2023) Incentivising early-stage debt restructuring for large firms: a study of Hong Kong and some United Kingdom comparisons. Journal of Corporate Law Studies, 23 (1). pp. 153-196. ISSN 1473-5970
Abstract
Financially distressed companies are more likely to be rescued as going concerns if they enter into debt restructuring early whilst still high up on the ‘demise curve’. In Hong Kong, early-stage non-consensual debt restructuring is effected via the scheme of arrangement. Yet, despite the similarities in the legislative framework, Hong Kong is less successful than the United Kingdom (UK) in using the scheme for early going-concern restructuring as the directors often invoke the scheme only when their company is far down the demise curve. We address the reasons for the difference based on the comparative outcomes of the schemes and interviews with insolvency professionals. Our results show that the reasons are attributed less to the differences in directors’ duties in the zone of insolvency but the perception on how these duties are enforced. Urgent law reform is thus required to incentivise directors to address the problems early.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © 2023 Informa UK Limited, trading as Taylor & Francis Group. This is an author produced version of an article published in Journal of Corporate Law Studies. Uploaded in accordance with the publisher's self-archiving policy. |
Keywords: | Insolvency and restructuring law; corporate demise curve; schemes of arrangement; directors' duties; the United Kingdom; Hong Kong |
Dates: |
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Institution: | The University of Leeds |
Academic Units: | The University of Leeds > Faculty of Education, Social Sciences and Law (Leeds) > School of Law (Leeds) |
Depositing User: | Symplectic Publications |
Date Deposited: | 10 Jan 2024 14:28 |
Last Modified: | 06 Jan 2025 01:13 |
Status: | Published |
Publisher: | Taylor and Francis |
Identification Number: | 10.1080/14735970.2023.2226805 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:207392 |