A Winner for Cross-Border Recognition: Hong Kong Extends Recognition to Solvent Liquidations in Re Forever Winner

Nov 2026

Key Takeaways

• The Hong Kong Court, at least at first instance, has changed its position in relation to the question of whether common law recognition extends to solvent liquidations. In Re Forever Winner, Linda Chan J held that the common law power of recognition and assistance “can and should” apply to compulsory liquidations of solvent companies.

• There is a clear limit. Voluntary liquidations are still excluded because the court does not supervise them.

• The UK is now the outlier. The US, Singapore, Australia and New Zealand all recognise solvent liquidations.

• This matters in practice for the Cayman Islands, where many liquidations involve solvent funds and holding vehicles.

The Debate

The UNCITRAL Model Law on Cross-Border Insolvency has been one of the most successful harmonising tools in modern insolvency law. Even so, one of its central definitions remains contested.

Article 2(a) defines a “foreign proceeding” as a collective judicial or administrative proceeding in a foreign State, “pursuant to a law relating to insolvency”, in which the debtor’s assets and affairs are subject to control or supervision by a foreign court, for the purpose of reorganisation or liquidation. The disputed question is whether that wording covers the liquidation of a solvent company.

The debate is shaped by the materials produced by UNCITRAL’s Working Group V, including the 1997 and 2014 Guides to Enactment and Interpretation, which do not provide an unequivocal answer to the question. Courts have read the same materials in different ways.

For the Cayman Islands, this is a practical question rather than an academic one. A large share of Cayman Islands liquidations involves solvent entities, typically investment funds and holding vehicles that are wound up for many reasons, including deadlock, loss of substratum or the end of an investment cycle. These proceedings are not private arrangements. They are conducted under the same statutory framework that governs insolvent liquidations.

Contrasting Views

In the United States, the Nevada Bankruptcy Court held in Re Betcorp that an Australian members’ voluntary winding-up was a “foreign proceeding” under Chapter 15.¹ Judge Markell’s reasoning rested on substance rather than labels. In his view, the hallmark of a “proceeding” is a statutory framework that constrains the company’s actions and regulates the final distribution of its assets.² A winding-up that takes account of the rights of all creditors is “collective”.³ He also held that the requirement for a law related to insolvency “does not require the company to be either insolvent or to be contemplating using the … law to adjust any debts”.⁴ US courts have consistently followed that approach since, including in ABC Learning Centres⁵ and Re Manley Toys,⁶ where the US Bankruptcy Court did not consider whether the companies involved in those proceedings were either insolvent or in financial distress.

More than a decade after Re Betcorp, the Singapore Court of Appeal, in Ascentra Holdings v SPGK,⁷ adopted and developed the same thinking. The Court held that “foreign proceeding” should be interpreted broadly. On that approach, “a law relating to insolvency” refers to the general statutory regime, and the company’s solvency is not a relevant consideration.⁸ The Court of Appeal noted that a solvent proceeding may become an insolvent one. It also observed that requiring the recognising court to determine solvency under foreign law would be undesirable.⁹ In its view, the Model Law’s rationale is engaged wherever the proceeding is collective, supervised by the court and directed to liquidation or reorganisation.

Australia and New Zealand follow the same body of authority. In Re Chow Cho Poon, the New South Wales court recognised a Singapore winding-up even though it had been ordered on the just and equitable ground alone.¹⁰ The court held that the whole body of winding-up provisions could be classified as “a law relating to insolvency”. New Zealand reached the same view in ANZ National Bank v Sheahan.¹¹

The United Kingdom remains the outlier. Under the Cross-Border Insolvency Regulations 2006, which give effect to the Model Law, earlier authorities looked receptive to solvent liquidation proceedings. In Re Stanford International Bank,¹² Lewison J found that the liquidators had been appointed under a law relating to insolvency, even though insolvency was not a ground for the winding-up. The Court of Appeal upheld recognition without taking the company’s insolvency into account.¹³ In Re Agrokor, the court accepted that the “insolvency law” requirement is met if insolvency is one of the grounds on which the proceeding can be commenced, even if insolvency cannot be demonstrated.¹⁴

The decisive break came in Re Sturgeon Central Asia Balanced Fund.¹⁵ Sturgeon was a solvent Bermudian company wound up on the just and equitable ground. After an extensive review of the Working Group V materials and the Guides to Enactment, all of which he regarded as directed to insolvency, Chief ICC Judge Briggs adopted a purposive construction. He read “for the purpose”, in Article 2(a) of the Model Law, as meaning the purpose of insolvency or severe financial distress.¹⁶ He held that Re Betcorp had taken a “wrong turn”¹⁷ and set aside the recognition order in respect of Sturgeon. At common law, Lord Sumption in Singularis went further, suggesting that assistance is not available in the case of a voluntary winding-up because it is essentially a private arrangement and “although subject to the directions of the court is not conducted by or on behalf of an officer of the court.”¹⁸ As a result, England and Wales now stand apart from their principal common law counterparts.

The Decision in Re Forever Winner

Forever Winner International Limited, a BVI company, held 49.06% of a Hong Kong-listed Cayman company. Its principal assets were all in Hong Kong: the shareholding, an unpaid dividend of HK$83.3 million, and several bank accounts with UBS. After the two ultimate beneficial owners fell out, the BVI Court wound the company up on the just and equitable ground in December 2025.¹⁹ UBS and the share registrar each refused to deal with the joint liquidators without a Hong Kong court order. In addition, the sale of the shareholding was conditional on Hong Kong recognition. The BVI Court then issued a letter of request.²⁰

The company was plainly solvent. That raised a difficulty. Hong Kong’s settled position, reflected in Re Supreme Tycoon²¹ and Re Seahawk,²² was that common law recognition and assistance did not extend to solvent liquidations. The question before the court was whether that position should change.

Hong Kong has not adopted the Model Law. Linda Chan J noted that the Hong Kong court therefore does not have to interpret “foreign proceeding” in the same way as Model Law jurisdictions.²³ She nonetheless held that the common law power of recognition and assistance “can and should” apply to compulsory liquidations of solvent companies.²⁴ The Judge gave four reasons:

1. The public interest. The public interest in an orderly worldwide winding-up applies equally to solvent and insolvent compulsory liquidation.²⁵
2. The purpose of liquidation. The purpose of liquidations is to “provide a statutory mechanism of collective execution and realisation of the property of the company, and achieving an orderly distribution to persons who have interests in the liquidation”. Liquidation is a statutory mechanism of collective execution. In a solvent case, the shareholders take the place of the creditors as the interested parties, and there is “no principled reason” to treat the two cases differently. That is particularly so because a company’s solvency may change during the liquidation.²⁶
3. Existing safeguards. The established requirements for recognition and assistance guard against any floodgates concern.²⁷
4. International thinking. The United States, Australia, New Zealand and Singapore have taken a consistent approach. Their reasoning reflects current expectations and provides “powerful reasons” for extending the common law.²⁸

The Judge drew a clear limit. Voluntary liquidations remain outside the extended power because they are not conducted under the supervision of the court.²⁹ The restated test therefore requires collective proceedings conducted under the supervision of the foreign court.

The decision matters because it reaches through common law development the same result that the leading Model Law jurisdictions have reached by statutory interpretation.

Conclusion

The direction of travel is now clear and the decision in Re Sturgeon appears increasingly isolated. The United States, Singapore and Australia recognise solvent liquidations as qualifying proceedings under their enactments of the Model Law. Hong Kong now reaches the same result for court-supervised solvent liquidations at common law. A solvent compulsory liquidation is collective, subject to judicial oversight, supervised by the court and designed to achieve an orderly and effective winding-up for the benefit of every stakeholder with an interest in the outcome.

The obvious question is how much longer the United Kingdom will stay out of step with the rest of the common law world.

Re Forever Winner is the latest in a series of helpful decisions on cross-border recognition and assistance out of Hong Kong. For example, we wrote about a recent judgment in Re Ourgame International Holdings Limited here. That is a decision confirming that recognition of a Cayman liquidation in Hong Kong remains available even where the company’s Centre of Main Interests (COMI) is in Hong Kong rather than the Cayman Islands.

Conyers routinely acts in Cayman Islands liquidation proceedings for office holders, creditors and contributories. Please contact the author or your usual Conyers contact for more information.

¹ In re Betcorp Ltd., 400 B.R. 266 (Bankr. Nev. 2009).
² In re Betcorp Ltd., 400 B.R. 266 (Bankr. Nev. 2009), at 278.
³ In re Betcorp Ltd., 400 B.R. 266 (Bankr. Nev. 2009), at 281.
⁴ In re Betcorp Ltd., 400 B.R. 266 (Bankr. Nev. 2009), at 282.
⁵ ABC Learning Centres, 445 B.R. 318 (Bankr. D.Del. 2010).
⁶ In re Manley Toys, 580 B.R. 632 (Bankr. D.NJ. 2018).
⁷ Ascentra Holdings v SPGK [2023] SGCA 32.
⁸ Ascentra Holdings v SPGK [2023] SGCA 32, at [36(a)].
⁹ Ascentra Holdings v SPGK [2023] SGCA 32, at [97] and [99].
¹⁰ Re Chow Cho Poon (Private) Ltd, (2011) 80 NSWLR 507.
¹¹ ANZ National Bank v Sheahan, [2013] 1 NZLR 674.
¹² Re Stanford International Bank & anor., [2009] EWHC 1441 (Ch).
¹³ Re Stanford International Bank & anor., [2010] EWCA Civ 137.
¹⁴ Re Agrokor, [2017] EWHC 2791 (Ch), at [63].
¹⁵ Re Sturgeon Central Asia Balanced Fund, [2020] EWHC 123 (Ch).
¹⁶ Re Sturgeon Central Asia Balanced Fund, [2020] EWHC 123 (Ch), at [6].
¹⁷ Re Sturgeon Central Asia Balanced Fund, [2020] EWHC 123 (Ch), at [121].
¹⁸ Singularis Holdings Limited v PricewaterhouseCoopers, [2014] UKPC 36, at [25].
¹⁹ Re Forever Winner International Limited (in Liquidation), [2026] HKCFI 5125, at [2]-[6].
²⁰ Re Forever Winner International Limited (in Liquidation), [2026] HKCFI 5125, at [7]-[9].
²¹ Re Supreme Tycoon Ltd (in Liquidation), [2018] 1 HKLRD 1120.
²² Re Seahawk China Dynamic Fund, [2022] 3 HKLRD 469.
²³ Re Forever Winner International Limited (in Liquidation), [2026] HKCFI 5125, at [34].
²⁴ Re Forever Winner International Limited (in Liquidation), [2026] HKCFI 5125, at [48].
²⁵ Re Forever Winner International Limited (in Liquidation), [2026] HKCFI 5125, at [49].
²⁶ Re Forever Winner International Limited (in Liquidation), [2026] HKCFI 5125, at [50].
²⁷ Re Forever Winner International Limited (in Liquidation), [2026] HKCFI 5125, at [51].
²⁸ Re Forever Winner International Limited (in Liquidation), [2026] HKCFI 5125, at [52]-[53].
²⁹ Re Forever Winner International Limited (in Liquidation), [2026] HKCFI 5125, at [37].