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in Spain (although we noticed in recent newspaper reports of the
Chapter 11 proceedings involving United States Lines, the shipping
company, a statement that any action against the company's ships
in a foreign port by a foreign company with a subsidiary operating
in the United States, would constitute contempt of court by that subsidiary). So many Hong Kong companies have important assets
abroad that this weakness might assume much greater importance than
it has in the United States. However, the same weakness also exists
in the British system of Administration Orders, so it is certainly not
a reason for preferring the British system.
11.16
As already indicated, the Standing Committee would prefer
to wait and see how the new Insolvency legislation works in practice
in Britain before deciding on what amendments, if any, are required
to the existing law in Hong Kong. There are obvious practical
reasons for preferring to adopt British legislation on technical
subjects such as this. The Companies Ordinance is based almost
entirely on British legislation and it would be difficult to graft
onto it a very substantial piece of technical legislation from another
jurisdiction. Nevertheless it may utlimately prove the more suitable
for this jurisdiction.
12. Non-executive directors
12.1
When the Standing Committee was considering the subject of
the provisions on Wrongful Trading in the Insolvency Acts 1985 & 86,
the question was raised of whether it was reasonable that the non-
executive directors of a company should be subject to the same penalties
for breach of this and other provisions in the companies legislation
160.