When Offshore Structures Meet Onshore Distress: The Growing Role of Data, Forensics and Restructuring Expertise in APAC

The corporate structures of Asia-Pacific businesses have become increasingly international. An operating business headquartered in China or elsewhere often is owned through holding companies incorporated in the Cayman Islands or British Virgin Islands (BVI) with financing arranged through multiple jurisdictions. As of August 2025, more than 60 percent of the companies listed on the Main Board of the Hong Kong Stock Exchange were incorporated in the Cayman Islands alone.  

These structures can provide legitimate commercial, financing and investment benefits. But when a company encounters litigation or a restructuring or insolvency process, the same structure can create significant complexity. 

The challenge is rarely confined to determining whether a company is solvent or how its creditors should be treated. Counsel, insolvency practitioners, lenders and other stakeholders may need to understand what happened to the business, where its assets are located, how transactions were undertaken, whether value has moved between related parties and what the underlying evidence actually shows. 

The combination of restructuring expertise, forensic accounting, eDiscovery and forensic technology can become particularly valuable in these situations. 

Offshore Incorporation Does Not Mean Offshore Operations

Just because an entity is legally incorporated in Cayman or BVI does not mean its operations or financing arrangements are limited to these jurisdictions. Should an insolvency or restructuring occur, court proceedings may take place offshore even if evidence necessary to understand the company may sit elsewhere. 

For instance, a Cayman- or BVI-incorporated holding company may have: 

• operating subsidiaries across mainland China, Hong Kong, Singapore, Australia or Southeast Asia 
• bank accounts and financing arrangements in multiple jurisdictions 
• directors and senior executives located in different countries 
• employees using local email, messaging and collaboration platforms 
• substantial intellectual property or other intangible assets 
• contracts with suppliers and customers throughout Asia 
• shareholder, intercompany and related-party arrangements 
• large volumes of electronic records spread across cloud platforms, laptops, mobile devices and enterprise systems 

Consequently, an offshore restructuring or insolvency can quickly become a cross-border evidence and information problem. 

The Information Problem in a Distressed Situation

A distressed situation exacerbates this problem. Management may change. Employees may leave. Systems may be shut down. Documents may be deleted or migrated. Simultaneously, administrators, liquidators, lenders and counsel need answers quickly. 

A related challenge involves establishing whether an interim manager has the formal authority to make decisions in each relevant jurisdiction. Depending on the applicable law and corporate structure, this may require board or shareholder resolutions, appointment documents, updated registers, powers of attorney, court or insolvency officeholder orders and evidence of any necessary local filings or regulatory approvals. Where a group operates across borders, authority granted at the holding-company level may not automatically extend to local subsidiaries. Counsel should therefore confirm the interim manager’s mandate, its jurisdictional scope and any limitations before significant legal, operational or asset-related decisions are taken. 

Once authority and control have been established, stakeholders can face questions substantially broader than those encountered in other forms of litigation. For example: 

• What assets does the group actually own? 
• Where are those assets located? 
• What happened to cash before the restructuring? 
• Were payments made to related parties or connected entities? 
• Were assets transferred at appropriate value? 
• What was the rationale for particular transactions? 
• Which entities were involved in the movement of funds or assets? 
• What communications took place between directors, shareholders and management? 
• What information was available to decision-makers at the relevant time? 
• Are the company’s financial records consistent with underlying transactional data? 
• Are there potentially recoverable claims against directors, officers, shareholders or counterparties? 

Connecting the Financial Story with Digital Evidence

Answering these questions can require integration of financial analysis with electronic evidence, like modern eDiscovery platforms that can provide a structured environment in which large volumes of information can quickly be preserved, processed, searched, analysed and reviewed.   

In an insolvency situation, the goal is to turn a company’s fragmented digital information into an evidentiary map. An analysis of communications between directors, shareholders and counterparties can identify previously unknown relationships or transactions. Email and document analytics can help establish timelines around significant corporate decisions. Structured data can be cross-referenced against documentary evidence to identify inconsistencies or unexplained movements. 

These tools become particularly powerful when combined with forensic accounting. Case in point: a restructuring advisor may identify an unusual related-party transaction from the company’s financial records. A forensic technology team can then search the underlying electronic evidence to understand how that transaction was discussed, approved and executed. 

Conversely, a forensic review may identify communications suggesting that assets or funds were being moved. The financial team can then trace those transactions through bank records, accounting systems and intercompany ledgers. 

The two disciplines answer different but complementary questions: 

Forensic accounting asks: What happened financially, how much value was involved and where did it go? 

Forensic technology asks: What electronic evidence explains what happened, who was involved and when and how decisions were made? 

Together, they can provide counsel and stakeholders with a more complete picture.  

Meanwhile, early technology integration provides another key benefit: speed. This is important in a distressed situation where assets and data may dissipate and stakeholders may need to make decisions before a traditional document review is possible.  

The North Star should be early intelligence rather than exhaustive review. Instead of asking a team to read millions of documents, use of analytics and technology can reduce the population to the most relevant information. This can make subsequent litigation or insolvency proceedings more efficient as the evidentiary record is already systematically established from the outset. 

The Restructuring Perspective

The other critical component is understanding the financial and operational circumstances surrounding the distress. 

Consider a BVI-incorporated property investment company that engaged BRG to provide restructuring support to a bondholders’ committee. The business faced significant governance, liquidity and capital-structure challenges while its offshore corporate domicile was disconnected from its China-based operating assets, management and financial information. At the same time, the company was dealing with contentious matters across jurisdictions including the BVI, mainland China and Hong Kong. 

A restructuring like this may require assessment of: 

1. Liquidity and viability: Can the operating business survive—and under what conditions? 
2. Capital structure: Who are the stakeholders, and what are their respective economic interests? Where does value break? 
3. Asset values: What is the value of the company’s businesses, subsidiaries, intellectual property or other assets? 
4. Related-party transactions: Has value moved between entities or stakeholders? 
5. Creditor recoveries: What recoveries might different classes of creditors realistically expect? 
6. Potential claims: Could transactions or conduct give rise to litigation or recovery actions? 
7. Evidence: What documentary and electronic evidence supports the conclusions? 

As these questions frequently overlap with others noted above, financial restructuring expertise can benefit from integration with forensic accounting and technology capabilities. 

From Restructuring to Recovery

As APAC businesses continue to operate with increasingly sophisticated cross-border structures, the distinction between restructuring, insolvency, litigation, investigations and technology becomes less meaningful. 

The most effective teams will seamlessly integrate these disciplines and empower offshore companies facing distress to understand where the value and evidence lie, who controls them and how they can be connected.  

How BRG Can Help

Learn more about BRG’s multidisciplinary platform for turnaround and restructuring, litigation, investigations and cyber and forensic technology capabilities.