HONG KONG Law and Practice Contributed by: Vincent Sum and Sylvia Leung, Mayer Brown
criteria and mitigate consolidation risks. This involves ensuring the transfer or assignment agreement clearly establishes the sale of assets, with no recourse to the originator, and limiting the Originator’s influence over the SPE’s opera - tions, and appointing a third-party cash manager with clear mandates authorising the cash man - ager (on behalf of the SPE borrower) to manage and effect payouts of cash proceeds in the bor - rower collection account in accordance with the pre-agreed waterfalls in the relevant transaction documents. Legal opinions are typically provided to confirm: • the validity and enforceability of the asset transfer as a “true sale” under Hong Kong law; and • the SPE’s insolvency remoteness, ensur - ing creditors of the originator cannot claim against the SPE’s assets. Material conclusions may also address compli - ance with relevant local regulations, and quali - fications often include assumptions about the factual accuracy of the transaction documents and the absence of fraud or misrepresentation.
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