The Lawyer’s new China Elite report contains the most detailed research available on the PRC legal market and contains unparalleled insight into the country's leading law firms. They vary in size, practice focus and geographic coverage, but they all share one common quality – ambition... Read more
This year, The Lawyer’s annual ranking of the largest UK law firms by turnover is available as an interactive, digital benchmarking tool. For the first time this will allow you to manipulate each data set against the metrics of your choice.
A unique scheme of arrangement drawn up by Lovells means that thousands of creditors of Hong Kong subsidiaries of Australian insurer HIH, currently in liquidation, will be paid years earlier than they would normally expect.
Lovells, on behalf of the liquidators, convinced the Hong Kong High Court to accept special provisions allowing the insured creditors, who have preferential status in Hong Kong, to be paid within four years rather than the normal 10-15 years. All the claims are small, and those against HIH Insurance (Asia) are worth up to HK$10,000 (£816).
Claims against HIH's Hong Kong subsidiaries have to be submitted to the scheme's administrators within the next six months to be adjudicated by the scheme administrators; disputed claims will be referred to a scheme adjudicator.
This is the first time that such a detailed scheme - in relation to insured creditors seeking money from their liquidated insurance company - has been set up. For instance, traditionally there is no adjudication arrangement and claims are dependent on the ability of liquidators to get money from reinsurers in order to pay the insured creditors.
In devising the scheme, Lovells made use of Section 166 of the Hong Kong Companies Ordinance, which is almost identical to Section 425 of the English Companies Act 1985.
The three HIH subsidiaries are HIH Insurance (Asia), HIH Casualty and General Insurance (Asia), and FAI First Pacific Insurance Company. The current number of creditors according to company records is 5,627, although this is expected to increase to 27,000 as more come forward. Among the leading creditors are the Hong Kong Law Society and the Hospital Authority.
The move by the Hong Kong court precedes the EC directive on the reorganisation and winding up of insurers, which will give insurers (although not reinsurers) preferential treatment. This is due to be passed in April 2003.
Lovells was selected by two PricewaterhouseCoopers partners, Jan Blaauw and Peter Whalley, who had been appointed as joint and several provisional liquidators of HIH in April 2001. While Lovells focused on drawing up the scheme, Hong Kong firm Deacons did most of the court work. Joe Bannister, the Lovells partner who drew up the scheme with Hong Kong partner Philip Gilligan, said the drafting, negotiation and approval took place within 12 months.
Lovells partner Peter Taylor is also acting for KPMG in relation to HIH's film finance claims in the UK.