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Cross Border Insolvency Update - April 2019

China Fishery Group Limited [2019] HKCFI 174

The High Court of Hong Kong refused to allow a Chapter 11 Trustee to disclose a Decision from Hong Kong winding up proceedings in the US bankruptcy court. The US proceedings were commenced to prevent a creditor from taking action following a breach of undertakings given to the Hong Kong court in circumstances where the company had no jurisdictional connection with the US.  

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King (Trustee), in the matter of Zetta Jet Pte Ltd v Linkage Access Limited [2018] FCA 1979 

The Australian Federal Court has clarified the limitations for foreign entities and their office holders in pursuing action in Australia to access the voidable transaction provisions of the Australian Corporations Act.  

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Dutch Supreme Court confirms Yukos bankruptcy cannot be recognised in the Netherlands

The Dutch Supreme Court has confirmed the decision of the Amsterdam Court of Appeal, which found that the bankruptcy of the Russian based oil company, Yukos, could not be recognised in the Netherlands because it violates Dutch public policy. 

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LK Bennett goes into Administration 

High end fashion brand LK Bennett went into Administration on 7 March 2019, putting approximately 500 jobs at risk.

In 2008, founder Linda Bennett sold a 70% stake in the business to private equity firm Phoenix Equity Partners for £70 million, but in 2017 returned to advise the business after the retailer started to struggle, and a short time later bought the company back.

Accounts for the year ending July 2017 show Linda Bennett invested £11.2m as working capital since September 2017 but show operating losses of nearly £6 million. 

Dan Hurd, Hunter Kelly, and Craig Lewis of Ernst & Young have been appointed as Joint Administrators.

Following the appointment of the Administrators, five stores have been closed, based in Sheffield, Bristol, Liverpool and two in London, resulting in approximately 55 redundancies.

A sale process for the business has commenced. Trading will continue as normal in the stores which remain open, although web sales will be temporarily suspended.

For any more information on any issues related to these articles please contact Alan Bennet on a.bennett@ashfords.co.uk or David Pomeroy on d.pomeroy@ashfords.co.uk.

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