On 30 January 2020, the World Health Organization declared that the coronavirus outbreak constituted a public health emergency of international concern. The PRC and Hong Kong have been at the forefront of the coronavirus outbreak. Whilst the Hong Kong government, judiciary and many in the private sector are gradually returning to "business as usual" after a monthlong work from home, and limited public services, understandably many companies and businesses will be keeping a close eye on the risks which the coronavirus outbreak poses to business in Hong Kong, including management of insolvency risks in the coming months.

Notably, during the 2020 to 2021 Financial Budget Speech in the Legislative Council on 26 February 2020, Financial Secretary Paul Chan noted that whilst he believes that the economy would recover after the coronavirus epidemic was over, its impact could “possibly be greater than that of the SARS outbreak in 2003,” and some sectors, e.g., tourism and consumption-related sectors, were already entering into a “harsh winter."

Our client alert focuses on management of the insolvency risks in light of economic uncertainties that may arise following the coronavirus outbreak. For information on the effect of the coronavirus on force majeure clauses, see Baker McKenzie's earlier alert "Coronavirus: Crisis management through force majeure – a Hong Kong law perspective."

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