Chinese publication China Business Law Journal cites comments from Naomi Moore regarding foreign bankruptcy laws

In a significant instance of a Chinese company's offshore subsidiary falling under a foreign bankruptcy regime, Winsway's restructuring has made headlines. This case, which involved a British Virgin Islands (BVI) parent company and parallel schemes of arrangement in the BVI and Hong Kong, was nominated for an Asia Legal Award in 2017, highlighting the impressive work of Hong Kong-based financial restructuring lawyer, Naomi Moore, and her team at Gump.

Naomi Moore, a partner at Gump, was quoted by China Business Law Journal in their article "Back from the Brink." Moore provided an example of the Winsway restructuring, which underscores the complexities of cross-border restructurings for Chinese companies that have expanded overseas.

In the US, foreign subsidiaries can be the target of involuntary proceedings such as chapter 7, according to Moore. The Winsway restructuring is a case in point, as it received relief from the US Bankruptcy Court under chapter 15 of the US Bankruptcy Code.

Moore emphasised the importance of vigorous disclosure, transparency, and creditor involvement in the US bankruptcy process. These elements were indeed key in the Winsway restructuring.

Chinese companies often use offshore holding companies, such as those in the Caymans or British Virgin Islands, to issue U.S. dollar-denominated bonds and other foreign debts. The use of multiple insolvency regimes, as seen in the Winsway restructuring (BVI, Hong Kong, and US), is a result of restructuring foreign debt, as Moore noted.

However, Moore did not specify any particular insolvency regimes from other jurisdictions that Chinese companies might use in addition to the US. She did mention the Chapter 11 and chapter 15 processes in the US as effective means of cross-border restructuring.

The Winsway restructuring is an instance where foreign subsidiaries can be the target of involuntary proceedings such as chapter 7 in the US, as mentioned by Moore. It serves as a reminder of the complexities and potential risks associated with restructuring foreign debt issued by Chinese companies.

In conclusion, the Winsway restructuring is a compelling example of a complex cross-border issue arising from restructuring foreign debt issued by a Chinese company. Moore's work on the case demonstrates the effectiveness of vigorous disclosure, transparency, and creditor involvement in navigating such complexities.

Chinese publication China Business Law Journal cites comments from Naomi Moore regarding foreign bankruptcy laws