IFLR 1000
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Restructuring and insolvency work continues to be modest in Hong Kong, as practitioners are unfortunately (or fortunately) limited by the continued success of the Hong Kong and Chinese economies.

However, the Lehman collapse continues to leave a glut of insolvency work that keeps many top partners busy-as one partner put it, the massive Lehman fallout really is "the work of a lifetime." This keeps contentious practices that have strong Hong Kong law capability quite busy.

There is also a modest amount of work that has come from local Hong Kong restructurings this past year, and these mandates are often taken by firms like Tanner De Witt and Mayer Brown JSM that have strong ties to local Hong Kong entities and companies.

Some leading partners also predict (in as much as these things can be predicted) that there will be a wave of China-based restructurings in the coming years. Questions over corporate governance and loans made by international investors to Chinese companies that are less than transparent could lead to a future pipeline of work as these entities run into trouble. One partner notes that, "with so much liquidity in the market, someone will always make bad business decisions. Liquidity means future work for restructuring and insolvency lawyers."

Hong Kong partners also continue to do high-profile restructuring work in jurisdictions across Asia, including places like Vietnam.

Allen & Overy's Asia restructuring team is led by practice head David Kidd, who has over 13 years of experience in the Asia restructuring market. Senior partner Joseph Tse leads the firm's Greater China practice, and he brings his 20 years of experience in Hong Kong to aid the team in advising on major restructurings in Hong Kong and China.

As with the counter-cyclical nature of most insolvency practice, Allen & Overy's team has had a successful set of years following the financial downturn in advising receivers in Lehman minibonds matters. This gave the practice a particular foothold in the market, which they seem to have expanded beyond Lehman mandates. Nevertheless, Allen & Overy's prowess and strong brand when it comes to advising clients on complex financial issues is what gives them their comparative advantage in the market.

This year, Kidd led the Allen & Overy team advising PricewaterhouseCoopers (PwC) as receivers appointed to the mortgaged property securing the Lehman minibonds, as well as advising the bondholders in the wind-up of the China Sun Bio-Chem Technology Group. Kidd also continues to advise the bank creditors of the high-profile Dubai World restructuring.

In another significant mandate Joseph Tse advised Glorious Property Holdings on their pre-IPO investment, as well as the multi-jurisdictional distressed acquisition of Hungarian chemicals manufacturer Borso Chem by leading China-based chemical manufacturer Wanhua Industrial Group.

Clifford Chance's clients value the fact that the practice can draw on the firm's talent pool of finance specialists for asset finance, derivatives, distressed debt and securitization, and that the firm is capable of tackling any complex finance issue. "For restructuring issues," one client tells us, "I would definitely go to Clifford Chance."

Recently, the team advised Lehman Brothers as agent of a syndicated loan, as well as the lenders and PricewaterhouseCoopers (PwC) as receivers and managers of various companies in the Skyfame Group a Hong Kong listed entity which holds Chinese real estate interests. The team advised on restructuring and enforcement strategies in relation to Skyframe's HK$1 billion ($12 billion) obligations. Skyframe has since returned to solvency and had its shared re-listed in the Hong Kong Stock Exchange.

Partners Scott Bache and James Wadham also recently acted for the liquidators Moulin Global Eyecare Holdings (MGEHL) in relation to audit negligence claims brought against KPMG. The liquidators in the matter sought damages of approximately $50 million. The deal represented one of the largest claims ever made against an auditor in Hong Kong courts.

Hogan Lovells has a very strong reputation in the market with Neil McDonald in particular recognised by clients and peers at rival firms as a leader in the field. "I rate McDonald and his team extremely highly," says one client. "He's generally my first port of call when I've got a problem. He's done work for us on an extremely difficult China litigation, and without their help we wouldn't be able to resolve problems that easily. They never let us down and we never felt that we didn't have a good service."

Hogan Lovells' international network also seems also to be a real asset, and clients are impressed with the synchronicity achieved by the different offices: "They are incredibly responsive. Doesn't matter if you're dealing with someone in London or Dubai, you will always get an immediate response-and if they're not there right away, they will get someone else on the line to help you. I call them a "very joined up" firm. What I like about [Hogan] Lovells is that they work as a team. For example they're good at identifying conflicts and building relationships. They provide training/seminars to our staff here and another country, and they have excellent technical resources and partners."

This year, Neil McDonald led the team in representing Shinning Crown Holdings, the majority shareholder in GOME Electrical Appliances Holdings, in China's largest ever public company shareholder dispute. GOME is one of the China's largest retail chains, and has over 700 stores and revenue of approximately $3.7 billion. Hogan Lovells' team was instructed to safeguard the majority shareholder's rights, and since being instructed has been instrumental in the removal of the Board's general mandate to issue shares, the appointment of two client representatives as directors of the company, and the retirement of the Chairman of the Board. The mandate speaks to Hogan Lovells' reputation in protecting shareholder rights in high-profile disputes.

McDonald also led a team that advised a banking syndicate led by RBS in the restructuring of Asia Timber Products. The syndicate comprises Rabobank, WestLB, ING Bank and Industrial and Commercial Bank of China (Asia), among others. The Hogan Lovells team has been advising the senior lenders on their restructuring and enforcement options.

Mayer Brown JSM has a large, dedicated restructuring and insolvency team consisting of four partners and one senior consultant, and advises on both high-profile restructurings and insolvencies.

With strong local links clients and peers agree that Mayer Brown JSM deserves its tier one, with John Marsden coming in for particular praise: "I find John Marsden to be well balanced and have good business sense. Based on the work we've done with them, I would rate Mayer Brown JSM very highly, as we're very pleased with the work they've done for us." The client adds that, "This isn't just based on what I've seen, but what an ex-partner believed as well!"

Richard Tollan also receives special praise from clients for his insolvency litigation skills. "We've won the court cases we've had to make," says one, "and Tollen was instrumental in that. I think it took pick and shovel work and it was very good because the work was complicated and some of it was just down to perseverance. I'd rate them as a five out of five, and would use them again in a heartbeat."

Mayer Brown JSM continues to advise nine liquidators of the Asian based Lehman Brothers Group entities in all aspects of liquidations relating to the company. The firm is involved in advising on asset recoveries relating to pre-liquidation transactions with assets valued over $10 billion, as well as the reconciliation of a number of intercompany trading accounts including OTC derivatives. The company advises on difficult cross-border transactions arising from the Lehman matters.

Mayer Brown JSM also continues to serve as counsel in the restructuring of the First Mobile Group Holdings. The team advises Malaysian and Hong Kong banks in relation to a proposed restructuring by way of a debt sale or scheme of arrangement with a potential investor. The team also represents the banks on issues relating to the preservation of claims against third parties and accounts receivables due and owing to the First Mobile Group.

Partners Ian De Witt and Robin Darton are veterans in the Hong Kong restructuring and insolvency arena, and the practice benefits from their especially close relationship with Hong Kong receivers and liquidators in addition to their deep understanding of and close relationship with the Hong Kong restructuring and insolvency community and government authorities. The group is most often involved in the Hong Kong elements of multi-jurisdictional and cross-border issues, on both the restructuring and insolvency sides.

Clients can't seem to say enough good things about Tanner De Witt's capability and service. As one client tells us: "Insolvency is one of Ian's specialty areas, and I've dealt with him for some time. He has high ability with insolvency work and in terms of the matters and claims he is pragmatic and commercial, ensuring we get a viable result in a short time. He always demonstrates the ability to identify the relevant issues and cut to the chase in dealing with them."

Another client notes: "The partners are very easy to get a hold of and always readily available. They are actively involved in cases rather than handballing them to other staff. They also put a lot of effort into a developing a relationship and maintaining it. They are very keen in nurturing relationship even when there isn't work going on at that time. In this respect, Tanner De Witt is probably one of the most proactive firms in HK."

The firm continues to advise in the Hong Kong restructuring of various entities in the APP Group, which involves extensive negotiations with bank creditors. The team also continues to advise the administrators of the UK Lehman entities in connection with intra-group claims concerning Hong Kong entities. In addition, Tanner De Witt represents the liquidators in the high-profile liquidation of Oasis Hong Kong Airlines, including advising on all aspects of the cross-jurisdictional administration from the final sale of aircraft to contentious court applications.

Clients are particularly complimentary of the work of partner Stephen Eno and special counsel Kwun Yee Cheung, who was promoted to partner in July 2011. According to one client, "Their work is simply excellent. I think the firm tells us to think ahead and that's very crucial and helps us to solve problems. There were many issues on a particular case of ours, and they would advise us on precautions and directions to be taken for strategies ahead of meetings." The client also seems to feel valued by Baker's restructuring and insolvency team. "I think they pay high respect to me as a client," he says, "and I highly appreciate it."

Despite the less-than-robust level of restructuring and insolvency work generally in the market, Baker's team has certainly managed to stay busy. In China and Hong Kong they have been recently advising the provisional liquidators of EganaGoldfeil Group in a matter that involves over 18 worldwide jurisdictions. The team has also acted for the liquidators of 3D Gold and Ngai Lik Industrial Holdings and the Receivers and Managers of Art Master Investment.

On the restructuring side, Baker's team often acts for the lead bank and steering committee on both local and multi-jurisdictional restructurings as well as for mezzanine or other subordinated creditors. The team has also been involved in a number of high profile restructurings on the debtor side, representing the financially distressed company or the private equity sponsors behind such companies. In these matters, the full-service nature of Baker & McKenzie's offerings to clients can be a distinct advantage in situations requiring a range of services.

DLA Piper's restructuring and insolvency practice is headed by experienced lawyer Graham Ridler, who has a strong presence in the Hong Kong restructuring and insolvency legal community. Clients have praise for Ridler and DLA's restructuring and insolvency team. As one client says: "He is highly competent and innovative. DLA Piper's team is commercial in their approach. They are technically sound and the advice I got was realistic and practical. As far as restructuring ability goes, I think they are one of the stronger firms in town. They are more than just litigators with a bit of restructuring experience."

The strength of DLA Piper's restructuring and insolvency team is further shown by the strong mandates they have received over the past year, including acting for the US Federal Deposit Insurance Corporation on a bank receivership. The group has also acted for the Receivers appointed by the US Securities and Exchange Commission on a cross border liquidation of shipping company Transfield ER Cape which included proceedings in the British Virgin Islands, Singapore, the UK and the US.

DLA Piper's restructuring and insolvency group also recently advised the liquidators of CSA Absolute Return Fund (CSA) on the approximately $180 million liquidation. The matter involved implementing a pooling arrangement, advising the Scheme Administrators on the setting up of a Scheme of Arrangement, investigating potential recovery claims to be brought by CSA, advising and commencing legal action against the administrator/custodian and auditors of CSA and conducting a section 221 private examination against a European bank senior employee.

Though Linklaters lost a major restructuring lawyer this year, the Hong Kong practice still has a robust history in restructuring work, especially when it comes to issues with highly complex international finance elements. Partners Trevor Clark, Melvin Sng and David Irvine bring their knowledge of complex structures and the Hong Kong and Asia markets to a variety of restructuring and insolvency transactions. One satisfied client says that, "We often use Melvin Sng."

In the past few years, Linklaters Hong Kong has taken a leading role in helping to unwind a large portion of the difficult Lehman Brothers assets in Hong Kong. The strength of the firm's securities and finance practices also augment Linklaters' restructuring capabilities in Hong Kong.

O'Melveny & Myers' practice is still relatively new on the Hong Kong scene, but the firm seems to move from strength to strength year upon year. The firm is known in Hong Kong for quality and the increasing number of mandates they are bringing in. As one client comments, "we've used Mark Fairbairn for a number of years now, and are quite happy with his work."

Fairbairn and his team continue to represent KPMG as the liquidators of Lehman assets with respect to loans advanced to Taiwan High Speed Rail, a significant asset, and a mandate that shows O'Melveny's ability to tackle cross-border insolvency issues.

This past year, O'Melveny's team has also represented Aim-listed LBCCA on a restructuring in connection with its move to Nasdaq.

A relative newcomer to the Hong Kong restructuring and insolvency market, Bingham McCutchen's two strong restructuring and insolvency practitioners are helping the firm make its mark in the region.

Recently, Mark Fucci led in advising on the cross border restructuring of international chip maker Spansion. This was a parallel US Chapter 11 restructuring of publicly traded parent and a Japanese Corporate Reorganization proceeding of Spansion Japan. Bingham's team advised the secured lender group and obtained the first formal creditors committee appointment in Japanese insolvency history.

Also this past year, Fucci and partner Naomi Moore initially represented an ad hoc group of bondholders and subsequently represented the Voluntary Administrators in respect of US law aspects of the Voluntary Administration of Griffin Coal, one of Western Australia's largest coal miners. Griffin Coal had issued approximately $475 million of unsecured bond debt prior to its failure, and the Voluntary Administration culminated in the sale of Griffin Coal's coal and power assets. Reportedly, Voluntary Administrators Kordamentha anticipate a return to unsecured creditors in excess of 90 cents on the dollar.

Deacons has earned mandates on major restructurings and insolvencies within Hong Kong, with a history of acting for large European and Asian banks, Asian debtors, overseas law firms and local insolvency practitioners.

Recently, Deacons acted for some of the main creditors in relation to the insolvency of various Asia Aluminium entities. Deacons' restructuring and insolvency lawyers were involved in matters in connection with the purchase out of liquidation, debt, equity, trade finance, credit insurance, security and the scheme of arrangement.

The arrival of new blood at Eversheds in the form of Kingsley Ong, Mark Yeadon and Vishal Melwani has put the firm on the map this year in Hong Kong's restructuring and insolvency arena. The emerging practice has recently advised KPMG on nine Lehman Brothers Hong Kong entities, as well as the restructuring of a Hong Kong-listed company.

Clients seem to have the highest praise for Eversheds new team. "Vishal is a future star litigator," one client tells us. "He has strong black letter skills and is attentive to detail. He was exceptionally gracious with clients, suppliers and other lawyers involved in the case, and is of high integrity." Another client enthusiastically summed up his impression of Kingsley Ong by saying, "Hey, I followed him to the new firm, didn't I? We think it's critical that his insight is embedded in our team. He's our first port of call, and Kingsley is a steady hand."

Norton Rose's experience in banking and finance and litigation work has led to the firm's creating a presence in contentious and non-contentious restructuring and insolvency work. Recently, Norton Rose has been acting for an Asian bank in defending a claim in the Hong Kong High Court by a local tycoon in relation to the enforcement of a side letter concerning his companies' proposals to banking creditors regarding the re-structuring of its debts. The total amount of the claim could be worth several hundred million dollars. Norton Rose also continues to act on advising and acting for the Trustee of Lehman Brothers liquidation appointed under the US Securities Investor Protection Act in proceedings relating to the assets held by various Lehman Brothers entities in Hong Kong.