Any company hit by financial distress could find itself losing the trust of its creditors. If that happens, we can put a scheme of arrangement (SoA) in place to remedy that situation. An SoA works by giving binding effect to a contractual arrangement between creditors and the company which is sanctioned by the Court to be effective and is intended to provide reassurance to creditors.
In practical terms, creditors (at least 75% in value and 50% in numbers) must vote in favour of an SoA, after which the company and creditors are bound by the terms of the agreement pursuant to Court sanction.
The flexibility of an SoA means creditors can approve restructuring of a debt, or other acceptable compromises, with the company.
Our business recovery specialists have put together various SoAs in Hong Kong and are equipped to advise on all their aspects and act as scheme administrators.