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East Africa: Restructuring Quarterly Bulletin – August 2023

4 September 2023
– 34 Minute Read



  • This edition of our quarterly restructuring bulletin outlines restructuring developments in Kenya, Mauritius, Tanzania and Uganda.
  • It also provides collated information relating to restructuring across Europe, the United Kingdom, the United States, and Asia and highlights ongoing developments relating to cryptocurrency firms. (There have been increasing actions by US regulators such as proposed receivership and ongoing court proceedings against the operations of some of the cryptocurrency firms in the country.)


by Richard Harney, Joyce Mbui, Vruti Shah

In the August edition of our quarterly restructuring bulletin, we highlight developments in relation to:

  1. Economic Overview
  2. Insolvency Statistics
  3. Distressed companies in the press
  4. Regulatory Developments
  5. Interesting Developments in case law

1. Economic Overview

The annual inflation rate in Kenya fell to 7.3% in July 2023 compared to 8% in May 2023. The Central Bank of Kenya projects that inflation is likely to continue to rise due to the increased cost of electricity and fuel. The government in August 2023 announced that it would utilize funds from the Petroleum Development Fund account to stabilize the price of fuel and retain current price pumps. To read more, click here.

Despite all the headwinds, CBK has indicated that the economy is likely to grow in 2023 driven by activity in the service sector and recovery in agriculture. The CBK noted in May that the following sectors where an increase in non-performing loans are manufacturing, trade, real estate, transportation, and communications. As a result of the current economic outlook, the CBK raised the central bank rate from 9.50% to 10.50% in June and is currently the prevailing rate as of August. This is the steepest increase since July 2015. To read more, click here.

2. Insolvency Statistics

Over the first half of the year, there has been a reduction in the number of applications for insolvency and restructuring processes for companies. In April, there were 5 petitions filed for liquidation of companies by the court. This is lower than the 8 filings recorded in February alone. In March, the filings were reduced to 3 and in May and June, the filings were 2 and 3 petitions respectively. Administration continues to be underutilised as an alternative to liquidation with only 2 applications filed in the first half of the year in February. To view the statistics, click here.

3. Distressed Companies in the Press

Several companies in financial distress have appeared in the press lately:

  1. Tusker Mattresses Limited – Tusker Mattresses Limited operates a chain of supermarkets under the name Tuskys Supermarket (Tuskys). Vide judgement dated 31 May 2023, the High Court appointed a provisional liquidator over Tuskys and issued an interim liquidation order. According to the Court, the cumulative debts owed by Tuskys to various creditors is approximately KES 4,500,000,000 (approx. USD 31,556,802.15). To read the case, click here.
  2. Kenya Power & Lighting Company (KPLC) –On 16 May 2023, the Cabinet approved the restructuring of KPLC’s balance sheet to restore profitability by addressing loan balances and the liquidity gap. According to the International Monetary Fund, the restructuring measures include selling transmission and asset lines, a new governance structure with private shareholders getting fair board representation and the development of a turnaround strategy. For the year ending 30 June 2023, the company had total liabilities of KES 269,529,405,000 approx. (USD 1,890,108,023.82) including various borrowings of 86,664,395,000 (approx. USD 607,744,703.66). Media reports indicate that the World Bank may provide a KES 40,800,000,000 (approx. USD 300 million) loan to the company. To read more, click here and here.
  3. Savannah Cement Limited (Savannah) – Savannah, a cement company, under administration issued a notice of appointment of administrator dated 12 May 2023 issued by the administrator, Harveen Gadhoke of Adili Associates LLP. The notice invited any person with a claim against the Company to submit their claim and supporting documentation to the administrator on or before 31 May 2023 for consideration. The administrator was appointed by Absa Bank and KCB Bank in a bid to recover a KES 10,000,000,000 (approx. USD 70,126,227.00) debt owed to the two lenders. To read more, click here.
  4. Keroche Breweries Limited (Keroche) – An insolvency petition has been filed against Keroche, a manufacturer of alcohol products, by the law firm Harris Hamilton and Mathews over unpaid legal fees after representing Keroche against the Kenya Revenue Authority at the Tax Appeal Tribunal. The insolvency petition is ongoing before the High Court. To read more, click here.
  5. Kenya Airways (KQ) – The Cabinet is considering options for the restructuring of KQ. According to the IMF, the government support has in the past months been limited to servicing KQ’s guaranteed senior external debt of USD 95,000,000 between October 2022 and April 2023 and has put in place a debt moratorium. As of the end of December 2022, the company had outstanding liabilities of KES 277,000,000,000 (approx. USD 1,942,496,487.90). A detailed business restructuring plan prepared in May 2022 has been put on hold to reassess the least-cost approach for the national budget. To read more, click here.
  6. Kenya Broadcasting Corporation (KBC) and Postal Corporation of Kenya (PCK) – The Cabinet is considering restructuring plans for KBC, the state-owned broadcasting company, and PCK, a state-owned logistics corporation. KCB and PCK have pending bills of KES 12,000,000,000 (approx. USD 4,151,472.40) and KES 5,400,000,000 (approx. USD 37,868,162.58) respectively. It is estimated that the two companies would take approximately 3 years to become financially viable under the proposed restructuring plans. To read more, click here.
  7. East African Portland Cement Company (EAPCC) – EAPCC, a Kenyan-based cement manufacturing company, has been seeking to fund a balance sheet restructuring. The company reportedly owes KES 13,000,000,000 (approx. USD 91,544,531.00) and is seeking KES 20,000,000,000 (approx. USD 140,837,740.00). According to media reports, the government has found a strategic investor willing to fund KES 15,000,000,000 (approx. USD 105,628,305.00) for 30% shareholding in EAPCC. However, the government’s shareholding in the company is approximately 25%. It is unclear which shareholder(s) the government will convince to join the deal to meet the required 30%. To read more, click here.
  8. Mumias Sugar Company Limited (Mumias) – An application has been filed for the appointment of a new administrator for Mumias on the basis that the term of the previous court-appointed administrator has lapsed by law. To read more, click here.
  9. TransCentury – The High Court has issued temporary orders restraining Equity Bank from appointing two receiver managers to seek repayment of a KES 6,000,000,000 (approx. USD 42,251,322.00) debt. The High Court will determine the substantive matter and issue directions as to whether the receivers were duly or improperly appointed. To read more, click here.
  10. Resolution Insurance Company Ltd (Resolution) – The Investor Compensation Fund (ICF) appointed by the Insurance Regulatory Authority as the statutory manager of Resolution, has recommended that the company should be liquidated. The firm reportedly owes KES 2,980,000,000 (approx. USD 20,984,823.26) to creditors. The court extended the term of the statutory manager for 6 months as ICF seeks to engage shareholders and the board of directors of Resolution on the basis for recommending liquidation. To read more, click here.

4. Regulatory Developments

There have been several proposed Bills, which if passed, would have an impact on restructuring and insolvency. We highlight the key changes to the proposed Bills below. Bowmans will monitor and update you on the developments through our regular newsflashes.

4.1 The Privatization Bill, 2023

As highlighted in the previous update, available here, the Kenyan Government continues to take steps towards allowing private investment in state-owned enterprises. To facilitate an easier privatization process for state-owned companies, the government has proposed the Privatization Bill, 2023 which will repeal the Privatization Act, No. 2 of 2005 if enacted into law. The Privatization Bill, 2023 proposes to inter alia remove the requirement for Parliamentary approval for the sale of state-owned enterprises and task the Cabinet Secretary for National Treasury with overseeing the process of privatization. To read more, click here.

4.2 The Anti-Money Laundering and Combating of Terrorism Financing Laws (Amendment) Bill, 2023

The Anti-Money Laundering and Combating of Terrorism Financing Laws (Amendment) Bill, 2023 (the AML Bill) proposes to amend multiple Kenyan laws to strengthen the anti-money laundering, combating of terrorism financing, and proliferation financing. The Bill was submitted to Parliament in August and is still going through the legislative process.

Key highlights:

  • The Insolvency Act, 2015 should apply to the liquidation, receivership or management of insolvent or liquidated limited liability partnerships (LLPs) and foreign LLPs (Foreign LLPs).
  • Foreign LLPs will be required to register in Kenya to carry on business in Kenya.
  • There are provisions for striking off LLPs and Foreign LLPs from the register of Limited Liability Partnerships.
  • There are requirements for LLPs and Foreign LLPs to file an annual declaration of solvency or insolvency with the Registrar of Limited Liability Partnerships.

4.3 Capital Markets Authority seeks to increase the maximum payout to investors from the investor compensation fund

The Capital Markets Authority (CMA) is seeking to increase the amount of money that can be paid out to investors from the Investor Compensation Fund (the Compensation Fund) from KES 50,000 (USD 352.09) to KES 200,000 (USD 1,408.38).

The Compensation Fund is established by the Capital Markets Act, CAP 485A. According to the Capital Markets (Licensing Requirements) (General), 2001, every licensed stockbroker or dealer is required to collect fees from every buyer or seller of a security and pay a portion of the fees to the Compensation Fund. The CMA has not clarified whether in a bid to increase the maximum compensation payable it would also seek an increase of the amount payable from transactions. To read more, click here.

5. Interesting Developments in Case Law

DAC Aviation (EA) Limited v AMRA Leasing Limited & 3 others (Insolvency Petition E039 of 2020) [2023] KEHC 20525 (KLR) (Commercial and Tax) (25 July 2023) (Ruling)

The Court had issued liquidation orders against the DAC Aviation (EA) Limited, which sought a further stay of the liquidation orders. In this case, the Court set out the principles that would be used to determine whether to grant a company time to demonstrate that its business had prospects of revival and could be salvaged. Where the Court concludes that a company could be salvaged, it can issue stay orders preventing the implementation of the liquidation process.

The Court held that first, the company must disclose to the court its financial position in the form of statement(s) of account including but not limited to its assets, revenues and liabilities. The information provided must give a complete picture of the company’s financial position. Second, the company must demonstrate that it is treating all the debtors of the same class equally. This would include disclosing all its creditors, the amount due to each of them and any payment plan for the creditors. Without a payment plan presented for the court and creditors to interrogate, the court would not grant a stay of its liquidation orders.


by Charles Mmasi and  Aisha Ally Sinda

Economic Overview

The AfDB estimates that real GDP growth is projected to rise to 5.3% in 2023 and 6.3% in 2024, driven by the sustained recovery in tourism and gradual stability in supply and value chains. However, the progress may be slowed down by the possibility of new COVID-19 variants and the effects of the Ukraine war, which has affected food and oil prices adversely.

In the last three months, we have identified the following trends in relation to restructuring, insolvency and dispute resolution in Tanzania:

Mergers & Acquisition

M&A is still the preferred exit route for financially distressed companies in Tanzania.  The Tanzania Investment Centre (TIC) has witnessed a rise in the number of registered M&A deals. In the last quarter TIC has registered 129 projects worth US$ 1,007.63 Million. M&A continues to play a significant role in the country’s economic development and inclusive growth. In the last quarter, 12 firms were acquired in deals worth $97.55 Million.

Distressed Companies in the Press

We observe that creditors are continuing to wind up debtors. For instance, Swala Oil and Gas Plc (Swala) which is listed on the Dar es Salaam Stock Exchange (DSE) announced that its creditors had resolved on 31 March 2023 to put it into a creditor’s voluntary liquidation process. As a result, the Kilosa-Kilombero license, in which Swala held a 75% stake, will revert to Tanzania Petroleum Development Corporation (TPDC) in accordance with the production sharing agreement with TPDC and the Government of Tanzania.

Strategies to reform public entities

In early August, the Treasury Registrar announced that the government is undertaking reforms and rebuilding of public institutions, including reviewing laws of their establishment to make sure that they perform efficiently. The reforms include winding up and merging some of the public entities which are in distress. There are 302 public companies in Tanzania. Out of them, 248 companies are fully owned by the government and the remaining 54, are partly owned by the government. It is expected that after the reforms, public entities will increase their efficiency and their dividends to the government.


by Rajiv Gujadhur


The Mauritius National Budget 2023/2024 was presented by the Minister of Finance on 2 June 2023 (the Budget) which provided insight into the economic outlook and the projections for the financial year 2023/2024, with measures focused on strengthening the economy in the wake of some of the most challenging economic times faced by Mauritius, due principally to the pandemic and the ongoing war in Ukraine.

The International Monetary Fund and Statistics Mauritius are aligned on the fact that Mauritius has exceeded by far its gross domestic product (GDP) growth forecast for 2022, with GDP exceeding earlier estimates by MUR 26 billion to reach Rs 570 billion. In conjunction with the proposed measures set out in the Budget, there is a high expectation of growth in the economic performance of Mauritius for the financial year 2023-2024.

Tax Reform

The Budget reflects the intention to restructure and improve the country’s current tax system to support economic growth, transparency and social equity. Some of the proposed measures are as follows:

  • the revamp of the personal tax regime through the introduction of the progressive tax system with tax rates starting from 0% and being capped at 20%;
  • the abolition of the solidarity levy;
  • the waiver of all outstanding debts of the COVID levy as of 20 January 2023, inclusive of penalties and interest; and
  • the review of the whole tax appeal system.
  • the increase in the existing partial exemption in respect of interest earned by a Collective Investment Scheme or a Closed-End Fund established in Mauritius from 80% to 95%, which will reduce the effective tax rate in respect of interest income of such entities from 3% to 0.75%. Such a reduced rate is conditional upon the Mauritian investor satisfying certain conditions regarding the substance of its activities in Mauritius. These conditions typically include:
  • carrying out its core income-generating activities in Mauritius;
  • employing directly or indirectly an adequate number of suitably qualified persons to conduct its core income-generating activities; and
  • incurring a minimum expenditure proportionate to its level of activities.

According to Maurice Stratégie, an organisation set up in April 2023 by the Economic Development Board which operates under the aegis of the Ministry of Finance, Economic Planning and Development, it is expected that the tax reform will bring about an additional 16,800 jobs and generate an additional GDP growth of 0.6 percentage points to the economy.  

Debt funds

Mauritius has long been recognized as an attractive destination for routing equity investments, attracting both domestic and global funds. However, in contrast to equity investments, debt investments by funds in Mauritius have remained largely underutilized.

The Budget signaled significant measures in this regard which will undoubtedly be welcomed by financial institutions and investors alike. In particular, it was announced that the Mauritius Securities Act will be amended to provide for Mauritius-based funds to invest via loans. This will put Mauritius on par in terms of its financial products offering with other domiciliation jurisdictions where debt as an investment instrument is quite common.

By addressing this shortcoming in the product offering, operators faced with high lending interest rates and emerging businesses that have a pressing need to access more affordable sources of finance would be afforded a viable alternative in a globally challenging economic environment.

Debt investment into India

A further noteworthy development within the area of restructuring relates to foreign portfolio investors (FPIs) investing in Indian debt securities, who have been benefitting from a concessional withholding tax rate on interest returns of 5% in India, until 30 June 2023. As from 1 July 2023, with the removal of the concessionary rate in India, the regular withholding tax rate of 20% applicable in India will apply to interest payments made to FPIs unless a lower rate is specified under a Double Taxation Avoidance Agreement (DTAA) between India and its DTAA counterparty.

In the case of the DTAA between Mauritius and India, the maximum withholding tax rate on interest paid by an Indian tax resident to a Mauritius tax resident is 7.5%. This rate is considerably lower compared to India’s tax treaties with Singapore (15%) and the Netherlands (10%). In the light of these latest developments, Mauritius therefore emerges as a preferred jurisdiction for structuring debt investments.

In this context, there are additional benefits to factor in for Mauritius-based investors specifically: any dividend distributed by the Mauritian investor to its shareholders and any interest paid by the Mauritian investor to a non-resident from its foreign source income will be exempt from withholding tax in Mauritius.


It is hoped that the latest measures proposed will make Mauritius an even more attractive and competitive proposition for international investors to consider. Additionally, the Finance (Miscellaneous Provisions) Bill 2023 was assented to law on 20 July 2023. We will provide further updates on the measures announced in the Budget as well as other changes brought about by the Budget.


By Brian Kalule and Brian Manyire, AF Mpanga Advocates

Economic update

  • In a bid to plug funding deficits and reverse the rising debt service burden, the government has adopted a raft of austerity measures such as a freeze on new loans, hires, pay rises, reducing spending on workshops and foreign travel for its officials in the new financial year starting 1st July 2023. This comes on the heels of the Central Bank’s warning that rising external finance demands would put pressure on the Uganda shilling.
  • The Uganda Bureau of Statistics data for October 2022 to May 2023 showed that inflation declined, though according to the Central Bank’s monetary policy statement for June 2023, the country’s economic growth remains uncertain on account of protracted weak global growth and lower commodity prices, a widening current account deficit, moderate public sector credit growth and rising domestic interest rates.

Distressed companies in the press

  • AYA Investments Uganda Ltd – In February this year, the liquidation process of the company commenced, and the court appointed the Director of Insolvency and Receivership at the Uganda Registration Services Bureau as the Official Receiver, and subsequently, as the Provisional Liquidator.

One of the larger creditors is the Industrial Development Corporation (IDC).  Recently, the Commercial Court dismissed an application by AYA Investments Limited to appeal against a USD 153 million award to the Industrial Development Corporation. The Court went ahead to register the arbitral award for purposes of enforcement, paving the way for IDC to recover the money. The loan arose out of credit arrangements between IDC as the lender and AYA Investments Ltd to finance the construction of a hotel known as the Pearl of Africa Hotel (now Win 5 Hotels and Spa).

Companies exiting Uganda

Eskom Uganda Ltd 

  • On 1 April 2023, Eskom Uganda Limited, a subsidiary of Eskom Holdings SOC Ltd (South Africa’s primary electricity supplier) announced that it had transferred its assets and interests to Uganda Electricity Generation Company Limited (UEGCL), a state-owned company, following the natural end of the Eskom Uganda Limited (EUL) Concession on 31 March 2023.
  • The EUL was established in 2002 to implement the Concession and Agreement between UEGCL and EUL. The EUL took over the operation and maintenance of Kiira and Nalubaale hydroelectric power stations on a 20-year concession on 1 April 2003.
  • In a press statement, Eskom Holdings said that the decision not to consider the renewal of the agreement is in line with its strategic direction to put more effort in revamping their performance in South Africa.

Regulatory developments

Capitalisation of Financial Institutions

  • I & M Bank Uganda also bolstered its capital levels. It received USD 5.92 million (USD 3.88 million as direct investment and USD 2.03 million through the conversion of preference shares) investment from I & M Bank Group, its holding company.
  • Guaranty Trust Bank (Uganda) Limited (GT Bank) announced its intention to transition from a Tier 1 commercial bank to a Tier 2 credit institution. Given GT Bank’s capital position of UGX 41 billion and the recent increase in the minimum paid-up share capital requirement for Tier 1 commercial banks to UGX 120 billion effective 31st December 2022 and subsequently to UGX 150 billion by 30th June 2024, the reclassification was necessary.

Migration of insolvency filings to Online Business Registration Service (OBRS)

  • The Uganda Registration Services Bureau (URSB) with support from the Ministry of ICT and National Guidance has developed an online registration system to support Business Registration and Insolvency services of the Bureau.
  • OBRS is a fully-fledged electronic registration system designed to facilitate seamless registration of companies, business names, legal documents, insolvency, and other related services that will reduce the time and cost of doing business and ease access to business-related information required in making investment decisions.
  • The rollout of the system is currently in its second phase which involves onboarding entities which are already registered by URSB and creating accounts to enable them to access all filing options through OBRS. This phase also includes insolvency services.

Public sector developments

  • The government has extended the implementation of a plan to merge and rationalise its agencies. The process of restructuring government agencies is intended to eliminate duplication and wastage in public service and is expected to result in UGX 1 trillion annual savings (approximately USD 269,594,100).
  • However, the new start date for implementation will be 1st July 2024 in order for the government to put in place an enabling legal framework.
  • The restructuring will, among others, see the Uganda National Roads Authority absorbed by the Ministry of Works, the National Identification Registration Authority absorbed by the Ministry of Internal Affairs, the Uganda Wildlife Authority and the Uganda Wildlife Education Center will be merged into one entity as will the Uganda Human Rights Commission and the Equal Opportunities Commission.

Significant case law developments

Ham Enterprises v Diamond Trust Bank Uganda and Diamond Trust Bank Kenya SCCA No. 13 of 2021

  • Ham Enterprises (Ham) borrowed money from Diamond Trust Bank Uganda (DTBU) and Diamond Trust Bank Kenya (DTBK). Ham defaulted on its loan repayments and the borrower sued DTBU and DTBK in the High Court. The High Court found in favour of Ham and ruled that the loan agreements with DTBK were illegal and unenforceable due to DTBK carrying out financial institutions business in Uganda without a licence from the Central Bank.
  • The decision of the High Court brought into question the validity of all syndicated loans in which foreign lenders were participants. According to the Uganda Bankers’ Association, a syndicated portfolio worth Shs5.6 trillion was at risk, given the rules around concentration risk which restrict local banks from providing all the credit required in the market. The decision was appealed to the Court of Appeal and then to the Supreme Court.
  • The Supreme Court held that a lending transaction between a foreign bank and a Ugandan borrower does not constitute “transacting financial institutions business” as defined by the Financial Institutions Act 2004 (FIA). This finally clarifies that a foreign lender does not require a licence from the Bank of Uganda (BoU) under the FIA to extend credit to Ugandan borrowers. The facility agreement between HAM, DTBU and DTBK was held to be lawful and the FIA did not apply to DTBIC.

Bank of India v NC Beverages Limited & Uganda Revenue Authority (URA) High Court Civil Suit No. 9 of 2021:

  • The Bank of India (BoI) advanced two credit facilities to NC Beverages Limited (Company). The two loans were secured by a debenture and further charged respectively over the Company’s fixed and floating assets. The charges were duly registered and perfected. The Company defaulted on the loans and filed a petition for winding up.
  • Slightly over one month following the Company’s filing of a petition for winding up on 21st April 2021, before the BoI had taken any step towards the realisation of the security, the URA on 25th May 2021 issued a warrant of distress authorising the attachment and sale of the Company’s assets, for recovery of unpaid taxes.
  • Before the BoI could realise the security, the URA seized and disposed of most of the assets mortgaged to the BoI, including motor vehicles, the Company’s entire industrial beverages processing plant, raw materials, assorted equipment, and office furniture, in a bid to recover unpaid tax a warrant of distress.
  • The court found in favour of the BoI had held that the rights of a secured creditor could not be affected by a petition for voluntary winding up or by a warrant of distress issued by the tax authorities. The tax authority was ordered to refund the proceeds of the sales to the BoI.


In this section, we highlight some of the key regulatory and corporate developments in the restructuring space around the world. We have collated information on:

  1. Europe
    1. Germany
    2. France
  2. United Kingdom
    1. Regulatory Developments
    2. Corporate Insolvencies
  3. United States
  4. Asia
    1. India
    2. China
    3. Japan
  5. Cryptocurrency Insolvencies and Restructuring


  • Germany – Between January and June 2023, there were 8,400 corporate insolvencies which represents a 16.2% increase compared to the same period in 2022. This represents the largest percentage increase in 20 years. The sectors with the most insolvencies were the construction sector, the trade sector (including maintenance and repair of motor vehicles), and the hospitality industry. A key insolvency filing has been that of Allgaier, an automotive systems supplier. A provisional insolvency administrator has been appointed by the court. The company, which has 1,700 employees, had undergone a restructuring in 2020 and an 89% stake in the company was acquired in 2022 by a Chinese investor. The number of insolvencies is attributed to high energy costs and high inflation. To read more, click here and here.
  • France – In the first quarter of 2023, the number of business bankruptcies rose by 8% compared to the fourth quarter of 2022. The sectors with the most corporate insolvencies were wholesale and retail trade, repair of motor vehicles and motorcycles, accommodation and food service activities. To read more, click here.


  • Regulatory Developments – The UK is considering implementing two United Nations Commission on International Trade Law (UNCITRAL) model laws on insolvency. The UK would be one of the first countries to implement the model laws.
    • UNCITRAL Model Law on Recognition and Enforcement of Insolvency-Related Judgements (2018). This model law builds on the UNCITRAL Model Law on Cross-Border Insolvency and seeks to address the extent to which insolvency-related judgements can be recognized and enforced in a foreign court. It allows for an authorised insolvency representative to seek recognition and enforcement (including interim measures) in a foreign jurisdiction. In particular, the UK government intends to adopt Article X of this model law. To read more, click here.
    • UNCITRAL Model Law on Enterprise Group Insolvency with Guide to Enactment (2019). This Model Law provides for insolvencies of group enterprises including where one or more businesses in the group are insolvent. The Model Law also supports international cooperation, for example, in situations where there are concurrent insolvency proceedings relating to enterprise group members in different countries. To read more, click here.
  • Corporate Insolvencies
    • In June 2023, the number of registered company insolvencies was 2,163. The largest number 1,759 consisted of creditors’ voluntary liquidations. There were 130 administrations, 14 company voluntary arrangements, and 260 compulsory liquidations. The sectors with most insolvencies were construction, retail, and food manufacturers.The tools under the Corporate Insolvency and Governance Act, 2020 are being utilized although not as much as expected. There have been 45 moratoriums obtained and 21 companies had registered restructuring plans since the law took effect. Read more here.
  • Hunter Boot Limited (Hunter) – a footwear company, has gone into administration, with amounts owing to creditors estimated at USD 143,188,207.20. Hunter underwent a pre-pack administration, in June 2023, with Authentic Brands Group, a US brand management company, acquiring it. To read more, click here.
  • Cineworld Group (Cineworld) Cineworld, the world’s second-largest cinema chain, filed for administration in the UK. The administration is to apply only to Cineworld and not to its operating companies or subsidiaries. The listed company has ceased trading as it undergoes a proposed restructuring. If implemented, the restructuring would involve the release of USD 4.53 billion of the group’s debt, new debt financing of USD 1.46 billion and a rights offering projected to raise USD 800 million. To read more, click here.
  • Wilko Limited – British discount retailer Wilko has entered administration, placing its 400 stores and 12,500 jobs at risk after failing to secure emergency funding due to a trading downturn. Despite immediate trading continuation, its administrators, PwC, cautioned that store closures and job cuts could occur if buyers are not found. Wilko, with a turnover of £1.2 billion, has garnered interest from potential recapitalization investors, but the uncertain timeline and cash position forced the administration move. This is the largest retail setback in the UK since McColl PLC’s collapse in 2022. To read more click here.
  • Case Law Update – City Gardens Ltd v DOK82 Ltd [2023] EWHC 1149 (Ch)
    • A UK court had relied on an exclusive jurisdiction clause in a contract entered into by two companies incorporated in the UK, that provided for the application of Hong Kong law rather than English law to dismiss a winding-up petition. The UK High Court reversed the district judge’s decision and held that English law could be applied to determine the matter.
    • The High Court relied on the Court of Appeal decision in BST Properties Ltd v Reorg-Apport Penzugyi RT which had held that when a court is considering the exercise of its power to wind up a UK company under section 122 of the Insolvency Act, 1986, the only relevant issue for determination is whether the petitioner is genuinely a creditor. The court can only consider whether the debt is disputed in good faith on substantial grounds.
    • The High Court held that even where the alleged debt is based on a contract that has an exclusive jurisdiction clause in favour of a foreign jurisdiction, the judgement as to whether to exercise the winding up power remains that of the UK domestic courts. Therefore, a winding-up petition cannot be dismissed on the grounds of the existence of an exclusive jurisdiction clause.
    • To determine the question of whether the alleged debt was disputed in good faith on substantial grounds, the UK domestic court can consider foreign law. However, the High Court also held that if foreign law is sought to be applied, the respondent must assert and show that Hong Kong law differs from English law. Where foreign law is not pleaded or shown to be different, the court would apply English law principles to determine the existence of the alleged debt. To read more, click here.
  • Case Law Update Re Leading Holdings Group Limited [2023] HKCFI 1770 and Cithara Global Multi-Strategy SPC v Haimen Zhongnan Investment Development (International) Co. Ltd. (Claim No. BVIHC(COM) 2022/0183)
  • A court in the British Virgin Islands (BVI) rendered a conflicting judgment compared to a Hong Kong Court regarding whether a global note investor has the right to file a winding-up petition. In the structure of a global note, a trustee holds the notes on behalf of the investors. In both cases, the petitioners were investors who held a beneficial stake through intermediaries like banks and brokers.
  • The Hong Kong court ruled that the beneficial owner lacked standing because (a) a beneficial owner of a debt trust could not petition for winding-up; and (b) the petitioner was not a contingent or prospective creditor due to the absence of a debtor-creditor link with the company. The Hong Kong court reasoned that the trustee is the appropriate party, being the debtor on record and the party to the debt agreement on behalf of other investors.
  • In contrast, the BVI Commercial Court held that an ultimate beneficial noteholder qualifies as a contingent creditor for appointing liquidators. The BVI court’s rationale was that a contingent liability arises when a debtor takes action to become indebted. In this case, even without a written debt agreement, the transaction structure created a situation where the company would owe a debt to the ultimate beneficial owner of the global note. To read more, click here.


  • In the first half of 2023, there were 2,973 commercial Chapter 11 bankruptcy filings compared to 1,766 over the same period in 2022. The insolvencies have affected most sectors including communications services who have recorded reduced earnings from advertising revenues. To read more, click here.
  • TrueCar Inc. (TrueCar) – TrueCar, an automotive digital marketplace, has unveiled a restructuring plan aimed at streamlining its organization. The plan includes declaring 102 positions (24%) redundant. The restructuring will result in one-time cash payments of around USD 7 million and an annual expense reduction of over USD 20 million.
  • Revlon Inc. (Revlon) – Revlon, a cosmetic, skincare, and personal care company, has emerged from its Chapter 11 bankruptcy as Revlon Group Holdings LLC. The company has simplified its capital structure by eliminating over USD 2.7 billion in debt, leaving approximately USD 1.5 billion in outstanding debt. The majority of the reorganized equity is owned by former lenders and a new board of directors has been formed. The reorganization was supported by 88% of creditors that held 98% of the company’s debt. To read more, click here.
  • Aearo Technologies (Aearo) – A US bankruptcy judge has ruled that Aearo, a company that manufactures and sells personal protective equipment and energy-absorbing products, does not warrant bankruptcy protection as it enjoys a greater degree of financial security. Aearo, along with its parent company, 3M, which operates in the fields of industry, worker safety, healthcare and consumer goods, argued that bankruptcy was the only way to resolve an ongoing litigation concerning its earplug products. The judge held that there was no imminent risk of insolvency and no evidence that a lawsuit settlement could not be reached outside of bankruptcy. USD 265 million has been awarded to plaintiffs in 10 out of the 16 concluded cases. There are approximately 260,000 pending cases. To read more, click here.
  • Purdue Pharma (Purdue) – The US Supreme Court has granted an emergency request to put on hold the bankruptcy reorganization of Purdue. The US Court of Appeals had allowed the bankruptcy to move forward. The reorganization plan included a proposal that allowed the Sackler family to pay USD 6 billion but only in return for a complete release from any future liability. The appeal was filed by the government with the key question being whether the bankruptcy court had the authority to release the Sackler family from claims by opioid victims. To read more, click here.
  • Vice Media (Vice) – Vice, a digital media company, is set to be acquired by three investment firms in a bankruptcy sale worth USD 50 million. The acquisition agreement will be presented to a bankruptcy court for approval. The company filed for Chapter 11 bankruptcy in May 2023 and three creditors initially made a bid of USD 225 million, which was later increased to USD 350 million. To read more, click here.
  • First Republic Bank – The Federal Deposit Insurance Corporation (FDIC) took over First Republic Bank and sold the bank to JPMorgan Chase for USD 10.6 billion. As part of the terms of the sale, First Republic’s stock will be delisted, shareholders will not receive any payments, and existing mortgages will be taken over by JPMorgan. Customers can continue using First Republic branches, which will integrate with JPMorgan’s network in a bid to provide uninterrupted services. To read more, click here.
  • Semrad Law Firm LLC (DebtStoppers) – DebtStoppers, one of the largest consumer bankruptcy law firms in the United States, has filed for Chapter 11 bankruptcy. The firm states that there has been a huge reduction in the number of filings from 1,112 cases in June 2019 to 486 cases in June 2021. To read more, click here.



  • As of March 2023, a total of 6,571 corporate insolvency resolution processes were initiated. Among these, 69% have been concluded, resulting in the successful rescue of 678 entities and the formulation of resolution plans for 102 cases. Additionally, 2,030 corporate debtors have received liquidation orders. Notably, there were 1,125 corporate insolvency actions commenced in 2022, marking a notable increase from the 887 cases initiated in the previous year. To read more, click here.
  • Go Airlines – Go Airlines has through a court-appointed administrator invited investors to submit acquisition proposals. The owners of the company before bankruptcy (Wadia Group) are not disqualified by law from bidding. Go Airlines filed for bankruptcy protection in May 2023. The number of grounded aircraft had increased from 7% in December 2019 to 50% in December 2022. To read more, click here.


  • In an effort to address the economic deceleration following the COVID-19 pandemic, China’s central bank implemented a reduction in a significant interest rate on 14 August 2023. In a statement by the People’s Bank of China, the one-year loan prime rate (LPR), a crucial gauge for corporate loans, was lowered from 3.55% to 3.45%, while the five-year LPR, which influences mortgage pricing, remained unchanged at 4.2%. These rates, which are closely monitored by the financial markets, have now reached historically low levels due to prior cuts in June 2023. The objective of this decision is to incentivize commercial banks to extend a greater number of loans at more favourable interest rates. To read more, click here.
  • China Evergrande Group – China Evergrande Group, a real estate developer, has extended the deadline for creditors to receive an incentive for its debt restructuring proposal. Creditors who agree to support the restructuring will receive a 0.25% consent fee based on the outstanding principal of their debts. The restructuring proposal requires approval from over 75% of the creditor value in each debt class in order to pass. To read more, click here.
  • Country Garden Holdings Company Limited – China’s largest private property developer, Country Garden (Company), has warned of default risks due to worsening financial performance and expressed remorse for its record loss of 48.9 billion yuan ($6.72 billion) in the first half of the year. This comes amid challenges in the Chinese property market, accounting for a significant portion of the economy, raising concerns about its impact on an already weakened economy. The sector has experienced defaults, uncompleted homes, and unpaid suppliers. Some offshore creditors are exploring options, including legal ones, in case of debt restructuring. The company’s shares dropped before announcing a plan to issue new shares to reduce outstanding loans. To read more, click here.


The number of corporate bankruptcies in Japan reached a five-year high of 4,042 during the first six months of 2023, rising by 32.1% compared to the previous year. Many businesses incurred higher debt to survive the COVID-19 pandemic, and the failure rate increased for companies with liabilities exceeding 10 million yen. The repayment of interest-free and unsecured loans offered under a government program and rising material and labour costs were contributing factors to the rise in bankruptcies. All industry categories saw an increase in bankruptcies, with the service sector and construction industry being the most affected. To read more, click here.


There have been increasing actions by US regulators that have impacted cryptocurrency firms. This includes fines, proposed receivership and ongoing court proceedings against the operations of some of the cryptocurrency firms in the country.

  • Bittrex Inc. (Bittrex) – Bittrex, a US-based blockchain digital asset trading platform, has filed for Chapter 11 bankruptcy. The company had 600,000 active users in the US. The largest depositor holds USD 14.6 million in assets and there are 16 customers with at least USD 1 million in assets in their accounts. The bankruptcy filing includes Bittrex Inc. and related entities. Bittrex plans to request the activation of customer accounts by the court to enable eligible customers to withdraw funds once regulatory requirements are met. The assets and liabilities are both estimated to be between USD 500 million and USD 1 billion, respectively. To read more, click here.
  • Prime Trust (Prime) – Prime, a cryptocurrency firm custodian, has halted operations and the Nevada Financial Institutions Division (NFID) has taken control. The regulator is seeking to appoint a receiver of the firm. According to the regulator, the firm owes clients over USD 85 million in fiat currency while only having USD 3 million on hand and is operating with a USD 12 million equity deficit. The company further owes USD 69.5 million in crypto and holds USD 68.6 million in crypto assets. BitGo Holdings Inc. announced that it had dropped plans to acquire Prime before NFID stepped in. To read more, click here.
  • Voyager Digital – Voyager Digital, a crypto lender, has been approved by a US bankruptcy judge to return approximately 35% of customers’ cryptocurrency deposits as it winds down operations after a failed acquisition. Additional distributions will depend on litigation outcomes. The company was set to be sold to FTX for USD 1.42 billion but the deal fell through as a result of FTX’s collapse. Another deal by Binance worth USD 1.3 billion was also called off. To read more, click here.