MACAU SAR, CHINA Law and Practice Contributed by: Calvin Tinlop Chui and Carla Veiga, Lektou
In some cases of gross negligence, wilful misconduct or fraud, criminal charges may apply.
• payments or set-off agreements involving unusu - ally large amounts made up to one year before the declaration of the bankruptcy, for the settlement of either outstanding or not outstanding debts; • collateral security given after the constitution of the liability secured, within one year before the decla - ration of the bankruptcy; • collateral security executed simultaneously with the constitution of the liability secured, within 90 days before the declaration of the bankruptcy; • transactions entered into up to two years before the declaration of bankruptcy that are onerous in nature, in that the obligations and liabilities assumed by the bankrupt are unreasonably higher than those assumed by the counterparty; and • execution of guarantees or letters of credit for transactions without any real advantage to the bankrupt, concluded up to two years before the declaration of the bankruptcy. The period within which transactions may be chal - lenged or reversed is as follows: • six months for any detrimental action taken by the bankrupt in relation to a company or civil partner - ship which they control (either directly or indirectly) or, if the bankrupt is a legal person, in relation to a company or civil partnership which controls the bankrupt’s capital or is controlled by the bankrupt, or in relation to the administrators, managers or directors of these entities; and
8. Setting Aside or Annulling a Transaction 8.1 Circumstances for Setting Aside a Transaction or Transfer Transactions concluded before the bankruptcy dec - laration order may be annulled and/or terminated and the assets returned to the bankruptcy estate, provided that the counterparty acted in bad faith. The following are examples: • non-onerous or gratuitous transactions (ie, trans - actions intended to provide a pecuniary or other benefit to one of the parties) entered into up to two years before the declaration of bankruptcy, which have resulted in asset dissipation; • asset distributions made in the year before the declaration of bankruptcy, where the portion allo - cated to the bankruptcy estate comprised assets that could easily be concealed, while the remaining interested parties received allocations of real estate or registered assets; and • onerous transactions (ie, transactions intended to provide an advantage to both parties) executed in the six months before the declaration of bank - ruptcy with: (a) an entity controlled (direct or indirectly) by the bankrupt; (b) an entity who controls (direct or indirectly) the share capital of the bankrupt; or (c) an entity’s administrators or directors. Furthermore, the following acts or transactions are presumed to have been concluded in bad faith for the purpose of defending against a claim of fraud:
• two years for all other transactions. 8.2 Claims to Set Aside or Annul a Transaction or a Transfer
Claims to set aside or annul transactions can be brought by either the bankruptcy administrator (sub - ject to authorisation given by the public prosecutor) or the bankrupt’s creditors.
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