Collapsing Hong Kong technology companies this year could leave former employees out of pocket by HK$816 million, according to liquidators Baker Tilly. The figure was extrapolated from Baker Tilly's own insolvency appointments, which account for about 9 per cent of all winding up orders. Baker Tilly found employees' claims account for 16 per cent to 24 per cent of total debt in liquidated technology companies, which is a higher proportion than in other sectors. Across all industries, employees' claims make up 4 per cent to 9 per cent of a failed company's debts. 'This implies that members of the public may be left with up to HK$816 million of unpaid remuneration and expenses from technology failures this year,' Baker Tilly joint managing director Rupert Purser said. Baker Tilly expects the final figures for this year to show an average of two technology firms per week failed, with total liabilities of HK$3.4 billion. Total company failures have increased by 40 per cent over the past two years and by 28 per cent over the first seven months of this year. The increase in total company failures underlines the need for a rescue mechanism in bankruptcy laws in Hong Kong, according to Mr Purser. In Chapter 11 of the United States bankruptcy laws, there is a rescue mechanism that gives companies breathing space from credit demands to restructure and try to save their business. 'Undoubtedly some technology companies could have been saved if we had had something similar to Chapter 11 here,' Mr Purser said. 'The reason is that the Chapter 11 mechanism gives companies breathing space where they can actually look at their underlying problem and come up with a solution.' Mr Purser referred to one company that could have been saved. 'Had we had a rescue mechanism, then maybe the directors could have used that and basically implemented that at an earlier stage to allow a real rescue to take place, rather than trying to fight fires when it was really too late.' The difficult financing environment for technology companies provides a high-return opportunity for investors who find the firms with viable businesses but short-term funding difficulties. 'I am aware of a company that was only several months ago talking to investors about a 51 per cent equity purchase for US$32 million and is today looking for about a 40th of that amount for outright purchase,' Mr Purser said.