Subtitle: After the debtor enters bankruptcy or restructuring, can offshore assets still be pursued, and what should an individual creditor do?
In the first three articles, we respectively discussed whether it is still worth pursuing recovery overseas after domestic enforcement proceedings have been closed without available assets, the boundaries for identifying assets held in the name of third parties, and how to gradually achieve control and recovery through freezing, disclosure and enforcement procedures once offshore asset leads are discovered. However, if the matter continues to develop and the debtor has become insolvent, enters bankruptcy liquidation, restructuring or other collective debt disposal proceedings, the recovery logic changes. At this point, it becomes necessary to simultaneously address whether individual enforcement continues, how assets scattered across different countries and regions are investigated, controlled and disposed of, and how multiple creditors' repayments are arranged. For corporate debtors with assets distributed across multiple jurisdictions, cross-border insolvency may therefore become another important stage of cross-border debt recovery.
01 The Logical Shift from Individual Enforcement to the Centralized Insolvency Repayment Mechanism
At the ordinary enforcement stage, each creditor mainly takes action around its own claim. If bank accounts are discovered, it may consider freezing or deducting funds; if real property, equity interests or other assets are discovered, it may evaluate, seal and dispose of them; if leads on fund transfers are available, it may further apply for disclosure or challenge relevant transactions. But after the enterprise enters bankruptcy or restructuring proceedings as a whole, the focus of the system begins to change.
The reason is that when the debtor's assets are no longer sufficient to satisfy all debts, if different creditors continue to race to freeze, seal and sell assets in various jurisdictions, a small number of faster-moving creditors may be paid first, leaving little or no assets for other creditors; enterprise assets that originally had overall going-concern or restructuring value may also be dismantled by individual enforcement. What the bankruptcy regime seeks to resolve is precisely this conflict between individual enforcement and overall satisfaction.
After entering a collective proceeding, creditors need to reassess their own repayment position, the impact on existing enforcement measures, and how offshore assets will be brought into the overall disposal.
An individual creditor’s actual recovery will still be affected by the nature of its security rights, its existing enforcement position, the law of the place where assets are located, and insolvency rules. Individual enforcement also needs to be considered together with the overall insolvency proceeding.
02 Recognition of and Judicial Assistance to Foreign Insolvency Proceedings in the Place Where Assets Are Located
Cross-border insolvency first confronts the territorial limits of judicial power. After a Chinese court orders a company into bankruptcy or restructuring, whether that order and the administrator's powers extend to offshore assets still depends on the law of the place where the assets are located.
If the debtor still has company equity, accounts receivable, bank assets, real property or other property overseas, it is usually still necessary to determine under the law of the place where the assets are located: whether the foreign bankruptcy or restructuring proceeding can be recognized locally; whether the foreign administrator's identity and powers can be recognized; and after recognition, what judicial assistance the local court can provide by way of stay, investigation, protection, administration or disposal of assets. Different jurisdictions do not take entirely identical approaches. Many countries and regions have adopted or drawn on the United Nations Commission on International Trade Law (UNCITRAL) Model Law on Cross-Border Insolvency, while other jurisdictions deal with foreign insolvency proceedings through local statutes, common law or special judicial cooperation mechanisms.
For domestic insolvency proceedings to actually reach offshore assets, it is usually still necessary to go through recognition of the proceedings and judicial assistance in the place where the assets are located.
Singapore’s judicial practice provides a relatively representative sample. Singapore has incorporated the Model Law on Cross-Border Insolvency into its local legal framework through the Insolvency, Restructuring and Dissolution Act, and foreign bankruptcy or restructuring proceedings may apply to the Singapore courts for recognition and corresponding judicial assistance when the conditions are met.
03 Judicial Practice on Recognition of Chinese Restructuring Proceedings in Singapore — The Delong Case
In 2025, the Singapore High Court in Re King & Wood Mallesons and other matters [2025] SGHC 67 dealt with the recognition in Singapore of the restructuring proceedings of three related Chinese companies. The case involved Jiangsu Delong Nickel Industry Co., Ltd. and two other Chinese companies. The three companies belonged to the same corporate group and entered consolidated restructuring proceedings in China. The restructuring administrator applied to the Singapore court for recognition of the Chinese restructuring proceedings and the administrator’s status in Singapore, and sought further relief relating to the investigation and administration of local assets.
The Singapore court first examined whether the Chinese restructuring proceedings satisfied the requirements of a foreign proceeding under the local Model Law on Cross-Border Insolvency. The court considered whether the proceeding was collective in nature, whether it was a foreign judicial proceeding, whether it was conducted under a law relating to insolvency or debt adjustment, whether the debtor's property and affairs were subject to the control or supervision of a foreign court, and whether the purpose of the proceeding was restructuring or liquidation, among other factors. It ultimately found that the Chinese restructuring proceedings met the requirements of a foreign proceeding.
It then had to determine whether the proceeding could be recognized as a foreign main proceeding. The core concept here is the Centre of Main Interests (COMI). The court did not only look at where the companies were registered, but also considered factors such as their actual control and management, main business, customers, creditors, employees, assets and transactional relationships. In this case, the main operating and management activities, significant creditors and a large number of assets of the three companies were concentrated in China, and the court ultimately found that their COMI was in China, thus recognizing the relevant Chinese restructuring proceedings as foreign main proceedings.
The case further illustrates how, after recognition of Chinese restructuring proceedings, the administrator obtained judicial assistance in Singapore in relation to asset investigation and administration.
04 Stay of Individual Proceedings, Asset Investigation and Administration After Recognition of Proceedings
After a foreign insolvency proceeding is recognized, the administrator may further apply for specific relief to assist in protecting, investigating and administering the debtor's assets. In Re King & Wood Mallesons, the relief granted by the Singapore court included several elements closely related to asset recovery.
First, after recognition of a foreign main proceeding, a stay may arise in respect of relevant individual lawsuits or proceedings. This reflects the basic logic of insolvency proceedings shifting from individual enforcement to collective treatment. Second, the Chinese restructuring administrator’s status as a foreign representative was recognized, enabling it to seek further judicial assistance in Singapore, rather than merely asking local third parties to cooperate unilaterally in its capacity as an administrator appointed by a Chinese court.
The asset investigation measures in this case are of particular practical significance. During the Chinese restructuring, the administrator discovered that the group had company equity, accounts receivable and certain historical transactions in Singapore that warranted further investigation, but did not fully possess the relevant companies’ books, transaction records and specific details. The Singapore court allowed the administrator to examine relevant persons, obtain documents and evidence, and investigate the debtor's property, business, rights, obligations and liabilities. The court specifically took into account the timing and amounts of the relevant transactions, as well as the importance of the investigative information in identifying potential claims and improving recoveries for all creditors.
The scope of investigation in insolvency proceedings is usually broader than an individual creditor’s enforcement investigation. At the individual creditor recovery stage, the investigation usually focuses on whether that creditor can next freeze or execute against a particular asset; after entering bankruptcy or restructuring proceedings, the administrator’s investigation may extend to the debtor’s overall asset situation, historical transactions, and potential claims.
Through cross-border insolvency proceedings, asset leads originally scattered across different entities, transactions and jurisdictions can be brought into an investigation and recovery framework aimed at expanding the debtor’s overall estate.
05 Disposal of Offshore Assets, Remittance and Protection of Local Creditors
Even after a foreign proceeding has been recognized, the taking control of, disposal of and remittance of offshore assets remain subject to the supervision of the court in the place where the assets are located.
Recognition of a foreign proceeding does not mean that the court in the place where the assets are located completely withdraws, nor does it mean that existing local security rights, third-party interests and creditor protection rules automatically cease to apply. In Re King & Wood Mallesons, although the Singapore court allowed the administrator to manage or realize the relevant Singapore assets, it also made clear that court permission was still required if assets were to be transferred out of Singapore. One important consideration behind this arrangement was to protect the interests of local creditors by giving them an opportunity to be heard before the assets were remitted into the foreign main proceeding. The court also noted that if local creditors could receive fair treatment and have an adequate opportunity to participate in the foreign proceeding, it would generally not lightly prevent the remittance of assets.
Cross-border insolvency requires coordination between the main insolvency proceeding and the assets, security rights, third-party interests and protection of local creditors in the place where the assets are located.
Recognition of Chinese insolvency proceedings overseas does not mean that the Chinese administrator can automatically bring all offshore assets directly into the Chinese insolvency estate. Who ultimately owns the assets, whether there are local security rights, whether third parties claim independent interests, whether disposal of the assets affects local creditors, and whether the assets can be remitted to the place of the main proceeding may all require further examination. Cross-border insolvency is based on procedural coordination among different jurisdictions; the main proceeding does not automatically displace the law of the place where the assets are located.
06 Creditors’ Rights Positioning and Action Arrangements in Collective Repayment
Offshore assets, related entities, abnormal transactions and fund flow leads previously identified may continue to play a role at the bankruptcy or restructuring stage. However, the way in which these leads are used may change.
First, the nature of the claim needs to be reassessed. Ordinary unsecured claims, mortgages, pledges or other security interests have different legal positions in collective repayment. The “asset value” previously observed also needs to be recalculated in light of security encumbrances and priority ranking.
Second, it is necessary to reassess any offshore freezing, sealing or enforcement measures already taken. After a foreign main insolvency proceeding is recognized locally, some individual enforcement proceedings may be stayed or otherwise restricted. A creditor cannot assume that, merely because it had previously initiated enforcement first, it can continue to proceed entirely outside the subsequent insolvency proceeding.
Third, attention should be paid to proof of debt and participation in proceedings. If the main insolvency proceeding, a local ancillary proceeding or other relevant proceedings have already commenced, creditors need to promptly confirm the filing deadlines, assertion of security rights, and the manner of participating in the restructuring or distribution.
In addition, if a creditor has already obtained leads in earlier investigations concerning clearly abnormal asset transfers, transactions at undervalue, receipts by related entities or other historical transactions, these materials may become even more valuable after entering bankruptcy. This is because the subject and purpose of recovery may change: it is no longer just one creditor trying to prove that “this asset can be executed against for my benefit,” but the administrator, on behalf of the overall pool of assets, investigating whether the relevant transactions can be recovered, thereby increasing the property distributable to all creditors.
At this point, creditors need to reassess their own rights, existing enforcement position, and the actual value of asset leads to ultimate recovery in light of the new collective repayment structure.
07 Using Cross-border Insolvency Mechanisms to Integrate a Multi-jurisdictional Asset Pool and Transaction Recovery
For complex, high-value debt cases, the debtor’s assets may already be distributed among multiple companies, multiple countries and different types of transaction structures. If each creditor separately investigates, litigates and enforces in each jurisdiction, it is not only costly but also prone to overlapping proceedings, asset competition and fragmented information. Once an appropriate main bankruptcy or restructuring proceeding exists, recognition of the proceeding and judicial assistance in the places where assets are located can sometimes reorganize the originally scattered asset investigation, transaction recovery and asset disposal.
Whether cross-border insolvency is preferable to individual enforcement needs to be assessed in light of the security situation, assets already under control, and the creditor’s specific legal position.
For cases involving dispersed assets, numerous related-party transactions and multiple creditors pursuing recovery in parallel, cross-border insolvency can be used to integrate asset investigation, transaction recovery and the overall asset pool.
Conclusion
After entering the bankruptcy or restructuring stage, recovery methods gradually shift from individual asset enforcement to procedural coordination, overall asset investigation and collective repayment.
At the ordinary enforcement stage, the focus is usually: find assets, control assets, and satisfy individual claims. After entering cross-border insolvency, the focus gradually shifts to: coordinating proceedings across different jurisdictions, investigating and protecting the overall assets, dealing with historical transactions, and achieving orderly repayment among different creditors.
Bankruptcy or restructuring proceedings commenced by a court in one country do not automatically extend worldwide, but through recognition of the proceedings and judicial assistance in the place where assets are located, offshore assets, information and historical transactions may still enter a more centralized investigation and collection system. What Re King & Wood Mallesons demonstrates is precisely how this logic operates in practice in a Chinese restructuring matter: the Chinese proceeding is the starting point, and the Singapore court’s recognition and assistance serve as the interface connecting local assets, information and the overall restructuring proceeding.
In appropriate cases, cross-border insolvency can also be used to organize offshore asset investigation, historical transaction recovery and centralized collection.
At this point, the four articles in this series have respectively discussed four core issues in cross-border debt recovery: whether it is worth continuing to pursue after domestic enforcement proceedings are closed without available assets, how far assets in the name of third parties can actually be pursued, how to achieve control through freezing, disclosure and enforcement after discovering assets, and how individual recovery shifts to cross-border centralized collection after the debtor enters bankruptcy or restructuring. There is no fixed process for cross-border recovery that suits every case. Specific actions should still be determined based on the basis of the claim, the status of the assets, and the stage of the proceedings.
Related Services
China-Singapore Legal News has launched the Cross-border Debt Enforcement and Asset Recovery Solution. For cases that have entered domestic enforcement closure without available assets, bankruptcy liquidation or restructuring proceedings and in which the debtor is found to have offshore assets, related entities or historical asset transfer leads, a preliminary assessment can be made of offshore recovery, cross-border insolvency recognition and centralized collection paths based on the existing claim basis, asset distribution and procedural status. If preliminary preparation is needed, a Preliminary Case Information Checklist can be requested.
References
[1] UNCITRAL, Model Law on Cross-Border Insolvency.
[2] Singapore Insolvency, Restructuring and Dissolution Act 2018, s 252 and Third Schedule. Singapore incorporated the UNCITRAL Model Law on Cross-Border Insolvency into its local cross-border insolvency regime through this Act.
[3] Re King & Wood Mallesons and other matters [2025] SGHC 67. The Singapore High Court recognized the restructuring proceedings of three Chinese companies as foreign main proceedings and granted relief in relation to the stay of proceedings, the foreign representative’s status, investigation of asset and transaction information, and local asset administration.
Disclaimer: This article is for general legal practice discussion only and does not constitute legal advice for any specific case or jurisdiction. Issues such as recognition of foreign insolvency proceedings, stay of individual enforcement, treatment of security rights, offshore asset investigation and disposal of assets differ significantly across jurisdictions. Before taking formal action, a specific assessment should be made based on the circumstances of the particular case and the law of the place where the assets are located.
This article is general information and not legal advice. Specific matters require assessment by appropriately qualified professionals.