Employee claims still dog HK rescue regime

Author: | Published: 11 Nov 2009

The industry fears Hong Kong’s consultation paper on a rescue regime for distressed companies is poorly drafted. The paper has not resolved several problematic proposals from 2001’s bill – particularly regarding the treatment of employees.

The market is relieved that the government has shelved 2001’s plan to extend liability for insolvent trading from directors to senior management. The new proposals also remove liability for trading when there was a ‘suspicion’ that the company was insolvent.

As reported in IFLR last week, the government is seeking comment on its plans to introduce a formal restructuring process to Hong Kong.

However, some feel that despite more than 10 years of consideration the process has not moved much beyond the 2001 bill. Key issues, such as the preferential treatment of employees, remain.