This site provides a resource for those looking for easy to access, plain English information related to liquidation, bankruptcy and corporate recovery in Hong Kong and the PRC. Whether you are dealing with this type of work on a day-to-day basis, as a student, or only occasionally come across the subject, we hope you will find the site interesting and useful.

The site is not intended to be a source of specific legal advice on insolvency matters and we cannot assume legal responsibility for the accuracy of the content.

Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debtor. Bankruptcy is not the only legal status that an insolvent person may have, and the term bankruptcy is therefore not a synonym for insolvency.

Mr Micawber in David Copperfield, Charles Dickens, 1849.

Annual income twenty pounds, annual expenditure nineteen pounds, nineteen shillings and six pence, result happiness. Annual income twenty pounds annual expenditure twenty pounds ought and six pence, result misery.

You can be insolvent without being bankrupt, but you can’t be bankrupt without being insolvent.

Confused yet? Many people think of the two as the same thing, but they are very different. Insolvency is a problem that bankruptcy is designed to solve. 

 a formal insolvency procedure in which a company is brought to an end; all of its assets are liquidated and the proceeds from the sale of assets are used to repay creditors. There are two main two types of liquidations for insolvent companies: compulsory liquidation and creditor's voluntary liquidation (CVL).

A corporate recovery is a rescue undertaken by professional accountants, who are trained to assist the management of a company in financial and other difficulties. This work is usually undertaken at the behest of the directors of the company and is normally undertaken by licensed insolvency practitioners.

IVL, CVL, CoI, C (WUMP)O, Ad VaL, Panel T? What's the difference between bankruptcy and insolvency?

Here is a handy glossary to guide you through the legal terminology and phraseology in bankruptcy, insolvency, liquidation and corporate restructuring.