As one of the world's three main financial centres and the
springboard to mainland China, Hong Kong is exposed to many of
the trends, ideas and innovative market practices adopted
around the world. The latest practice to hit the shores of Hong
Kong is the pre-packaged sale of insolvent businesses, commonly
referred to as pre-packs.
While there are conflicting claims as to the exact origins
of pre-packs, it seems that their formative years were spent in
the hectic world of United States bankruptcies. However, it was
in the United Kingdom that pre-packs really developed a new
level of market prominence. The out of court administration
procedure introduced into the United Kingdom by the Enterprise
Act 2002 (UK) increased their popularity further, as it meant
pre-pack sales could be implemented without first obtaining any
court or creditor approval.
Despite Hong Kong being a common law jurisdiction with its
insolvency laws based...