Corporate Recovery

JLA offers a broad range of corporate recovery and insolvency management services. We offer professional and pragmatic advice to insolvent debtors, lenders and other stakeholders. Our goal is to provide an effective and efficient resolution to all corporate and personal financial difficulties through comprehensive and personalized services.

Services to Banks and other Financial Institutions

If an institution is a debenture holder wishing to enforce its security under a fixed or floating charge, or a mortgagee desiring to take possession of a mortgaged property, JLA provide receivership services to maximize asset realizations and effective recoveries under secured lending arrangements.

Corporate or individual debtors may encounter difficulties in repaying financial obligations. As a last resort, a creditor may wish to petition to wind up or bankrupt the debtor.  JLA can act as liquidators or trustees in these proceedings.  We can effect an efficient and appropriate realization of the company’s or bankrupt party’s assets, and will seek to maximize the creditors’ and all other stakeholders’ returns by completing the liquidation or bankruptcy administration promptly and in a cost effective manner.

Receivership

Liquidation

Bankruptcy

Services to Attorneys

JLA works with law firms whose clients (financial institutions, corporate or individuals) may encounter situations where insolvency advisory or management services are required.  We provide receivership, liquidation, scheme of arrangement, bankruptcy, individual voluntary arrangement and informal arrangement services that meet the needs of these clients.

Receivership

Liquidation

Administration

Scheme of Arrangement

Bankruptcy

Individual involuntary arrangement

Informal arrangements

Services to Creditors

When debtors are unable to meet their obligations, creditors require specialist professional service to assist in debt recovery.  JLA provide receivership service to debenture holders to assist recovery in connection with secured lending under fixed or floating charges.  Liquidation and bankruptcy services are also available to unsecured creditors to maximize their recovery in the administration. 

In certain instances, debtors may wish to negotiate an amicable settlement through a scheme of arrangement or an informal arrangement. JLA possesses the expertise and experience to advise in these types of situations.

Receivership

Liquidation

Scheme of Arrangement

Bankruptcy

Informal arrangements

Services to Shareholders

In the unfortunate event that a business under-performs and experiences difficulties repaying its debts, JLA professionals can assist in devising schemes of arrangement whereby the company can reach a legal binding arrangement with preferential and ordinary creditors to restructure obligations.

In some instances, shareholders are unwilling to support the continued operation of a company or a business may have reached the end of its economic life.  In other situations, business partners may find that they have irreconcilable differences and may wish to cease cooperation. In order to properly wind up and liquidate a company, stakeholders may consider various liquidation processes.  JLA has a dedicated team of specialists that focuses on winding up of all types of companies using the most efficient liquidation procedures.

Liquidation

Scheme of Arrangement

Services to Regulatory Bodies

A licensed corporation or an individual may violate or breach provisions of enacted ordinances.  For a regulatory body such as the Securities and Futures Commission or the Department of Justice, use of a court-appointed administrator and receiver is often an expeditious and appropriate means for taking control of a company’s management and preserving assets before any dissipation occurs.

Receivership

Administration

Services to Individual Debtors

Individuals may face financial difficulties arising from circumstances such as loss of employment, decline in earnings, enforcement of personal guarantees or downturns in a trade or business.  This may lead to an inability to meet financial obligations when they fall due.   JLA can act as trustees of individual bankruptcy estates, or alternatively, nominees for individual voluntary arrangements, with the objective of devising the best solutions to allow the earliest rehabilitation of an individual’s financial situation.

Bankruptcy

Individual involuntary arrangement

Informal arrangements

Receivership

Receivership refers to the appointment of independent receivers to manage, control or realise assets on behalf of secured creditors, or pending the resolution of criminal proceedings or disputes. JLA professionals are experienced in acting as receivers in a variety of circumstances in a vast range of industries.

Appointments by Secured Creditors or Lenders

Manage and realise the secured assets for the benefit of the secured creditors. Our prime objective is to maximise value for, and mitigate the risks faced by, secured creditors.


Liquidation

Creditors' Voluntary Liquidation

When a company is unable to pay its debts and there is no prospect of rescue, then it is in the best interests of creditors to wind up the company quickly and efficiently. A CVL can be initiated by the passing of a special resolution of shareholders, followed by a meeting of creditors at which a liquidator is appointed. Alternatively, in cases where it is necessary to place the company under the control of a provisional liquidator urgently, liquidation can be initiated and a provisional liquidator appointed by a resolution of the directors, importantly however, creditors will have the final say on the appointment of the liquidator.


Members' Voluntary Liquidation

Companies sometimes outlive their purpose, have ceased trading or have been dormant for some time, and it can be in the best interests of shareholders to wind up the company, pay its liabilities and distribute any surplus assets to the shareholders, saving ongoing accounting, taxation and secretarial costs. This applies only to solvent companies and the directors must sign a certificate of solvency.

Compulsory or Court Liquidation

This type of liquidation generally occurs following a petition to the Court by a creditor (on the grounds of insolvency) or a stakeholder (on just and equitable grounds, particularly in cases of directors and shareholders' disputes). In cases where assets are at risk of being dissipated before the hearing of the petition, a provisional liquidator may be appointed as an interim measure.

Selected Engagements:

  • Investigations and expert testimony assisted in the recovery of HK$346 million from the former Chairman of a publicly listed  company.

  • Investigated and testified in Hong Kong's largest money laundering case. Police estimated laundered funds of HK$50 billion over 5 years.

  • Assisted minority shareholder to recover equitable settlement for his share of the business.

  • Investigated the placement of a controlling interest in a publicly listed company at a consideration in excess of HK$1 billion; determined whether a general offer was required.

  • Expert forensic accountants in Hong Kong's longest-running commercial crime proceedings.

  • Liquidator of the promoter of a pyramid-selling scheme with 3,400 investors. Reconstructed all books and records; traced and recovered funds in Taiwan, Switzerland and the Philippines.

  • Successfully investigated and traced transactions in North America, Europe, Asia Pacific and numerous offshore jurisdictions.

Administration

JLA has considerable experience in acting as Court-appointed Administrator under the provisions of the Securities and Futures Ordinance to take control and manage the assets of certain persons licensed with the Securities and Futures Commission, to carry out investigations into their affairs, and to preserve and distribute the assets belonging to the clients of these persons.

Selected Engagements:

  • Administrator of the affairs of a licensed investment advisor who controlled several Funds of Hedge Funds. Involved the tracing of more than US$200 million of investors' monies and the identification and control of various assets placed into Hedge Funds which the investment advisor also controlled.

  • Administrator of the affairs of a licensed securities dealer, responsible for the identification and preservation of assets belonging to more than 600 active clients of the company, and the return of securities to clients. 

Scheme of Arrangements

Winding up a company experiencing difficulties in paying its debts may not always be in the best interests of creditors, the company or its directors. It may result in the demise of a business with good future prospects, force the sale of assets at less than going concern value and generally diminish the return to creditors.

A scheme of arrangement is essentially a legally-binding contractual arrangement between a company and its creditors, to enable a restructuring of debts or a compromise to be implemented. It requires the agreement of at least 75% in value and 50% in number of the different classes of creditors voting at the relevant meetings, and must be sanctioned by the Court. A scheme of arrangement may be proposed as an alternative to liquidation or implemented in conjunction with a liquidation.

JLA offers experience in reviewing and analysing the affairs of companies in financial distress, proposing suitable and workable terms for a scheme of arrangement, drafting the scheme document and acting as the scheme administrator to ensure that the objectives set out in the scheme document are achieved.

We have implemented schemes of arrangement in connection with the workout of various listed companies, using the moratorium available under Provisional Liquidation when faced with potential litigation from creditors.

Our goal is to find the best solution for creditors and the debtor company.

Bankruptcy

Bankruptcy is the administration of an individual's bankrupt estate as a result of debts personally incurred, including personal guarantees. Bankruptcy has the effect of discharging you from most of your debts; however, most of your assets vest in your trustee who is obliged to sell them and distribute the proceeds to creditors.

As an alternative to bankruptcy, if the debtor is in secure employment, has a business with potential or has some assets of value, the debtor may be able to propose an Individual Voluntary Arrangement ("IVA") to creditors, which, if accepted, could be in the best interests of all parties, and help the debtor to avoid formal bankruptcy.

We have experience in acting as trustees in bankruptcy or as nominees in IVAs, or in providing pre-bankruptcy advice to debtors and financiers. We can help debtors to relieve the stress associated with their financial pressures and determine the best solution to their financial problems.

Selected Engagements:

  • Trustee of the bankrupt estate of a deceased debtor, whose assets included various properties and the controlling interest in a property-holding company. Successfully obtained a proposal from the bankrupt's widow for full payment of all creditors, with a subsequent rescission of the administration order.

  • Appointed by the Official Receiver's Office to carry out a preliminary examination of over 800 bankrupts over a 12-month period.

  • Trustee of the bankrupt estate of a former chairman of a Hong Kong listed company with substantial debts.

  • Trustee of the bankrupt estate of a debtor held in a detention centre in the PRC, whose assets were not easily realisable and who was involved in divorce proceedings in both the PRC and Hong Kong. Successfully implemented a scheme of arrangement, which enabled all creditors to be paid in full.

Individual Voluntary Arrangement

Bankruptcy is the administration of an individual's bankrupt estate as a result of debts personally incurred, including personal guarantees. Bankruptcy has the effect of discharging you from most of your debts; however, most of your assets vest in your trustee who is obliged to sell them and distribute the proceeds to creditors.

As an alternative to bankruptcy, if the debtor is in secure employment, has a business with potential or has some assets of value, the debtor may be able to propose an Individual Voluntary Arrangement ("IVA") to creditors, which, if accepted, could be in the best interests of all parties, and help the debtor to avoid formal bankruptcy.

We have experience in acting as trustees in bankruptcy or as nominees in IVAs, or in providing pre-bankruptcy advice to debtors and financiers. We can help debtors to relieve the stress associated with their financial pressures and determine the best solution to their financial problems.

Selected Engagement

  • Appointed nominee in various individual voluntary arrangements, which allowed the debtors to avoid bankruptcy and provided for substantially higher returns to creditors.

 

Informal Arrangement

Scheme of Arrangement sometimes can be a cumbersome and expensive process. Informal Arrangement, as an alternative, can also provide a company an effective solution to restructure its debts. Informal Arrangement is essentially an agreement between a company and its creditors to enable a restructuring of debts or a comprise to be implemented. Unlike Scheme of Arrangement, Informal Arrangement has no count involvement or standard contract.

JLA offers experience in reviewing and analysing the affairs of companies in financial distress, proposing suitable and workable terms for an informal arrangement. We can provide professional advice and act as intermediary between the company and its creditors in reaching the agreement especially when dealing with complicated negotiations.