Cross-border issues

The cross-border aspects of corporate insolvency raise complex issues arising from the fact that different jurisdictions have a diversity of laws and practices for dealing with such matters. The importance of this issue has gained greater prominence because in a globalized market place it is not usual for companies have business dealings, operations, and assets in many countries. As such when companies face financial distress or had collapsed, creditors in multiple jurisdictions compete for whatever assets these entities possess across a number of jurisdictions. However, in the absence of a harmonization of these laws, there has been a historical tendency for each jurisdiction to view assets and liabilities under its control in isolation. The result has often been economically harmful chaos. Such sentiments had become more acute in the post Global Financial Crisis economic climate. Hence, Hong Kong's courts will most likely hear more cross border corporate insolvency cases as the territory is a host to a large number of overseas companies, as well as offshore investors.