ONC Corporate Disputes and Insolvency Quarterly - April 2020
Business Law Articles
ONC Lawyers
Hong Kong
| Dear Clients and Friends,
This special newsletter aims to regularly update practitioners on important and noteworthy cases in the areas of corporate disputes and insolvency in Hong Kong, the UK and other common law countries. In this issue, we have highlighted: |
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| · 10 Corporate Insolvency Cases
· 3 Cross-border Insolvency Cases
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· 2 Corporate Disputes Cases | |||||||||||||||||||||||
| Our selection of cases and our analysis of them may not be exhaustive. Your comments and suggestions are always most welcome. Please feel free to contact me at ludwig.ng@onc.hk
Best regards, Ludwig Ng Partner, Solicitor Advocate ONC Lawyers
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| HEADLINES OF THIS ISSUE | ||||||||||||||||||||||||
| • | Corporate Insolvency Cases | |||||||||||||||||||||||
| 1. Misfeasance claims against delinquent directors must be commenced by Summons under Rule 58 of the Companies (Winding-Up) Rules | ||||||||||||||||||||||||
| China Medical Technologies, Inc (in liquidation) and others v Wu Xiaodong and others [2019] HKCFI 2957 | ||||||||||||||||||||||||
| 2. The Court has no power to bypass the statutory regime, which requires the liquidator’s costs be taxed by the Registrar | ||||||||||||||||||||||||
| Re the Incorporated Owners of Tai Chi Factory Building (in liquidation) [2020] HKCFI 371 | ||||||||||||||||||||||||
| 3. Court refused to wind up China Solar Energy, as the provisional liquidators’ reports suggest that if the company were to be wound up the creditors would have zero recovery | ||||||||||||||||||||||||
| Re China Solar Energy Holdings Ltd (formerly named REXCAPITAL International Holdings Limited) [2020] HKCFI 481 | ||||||||||||||||||||||||
| 4. The power to grant a stay of a compulsory winding-up is discretionary. The fact that the petitioner is the sole shareholder and creditor of the company is, in itself, not adequate for granting a stay | ||||||||||||||||||||||||
| Re Hong Kong Pak Tat Trading Co (in compulsory liquidation) [2020] HKCFI 287 | ||||||||||||||||||||||||
| 5. Interim receiver appointed over pledged shares, in light of drastic dilution of a majority shareholding | ||||||||||||||||||||||||
| Emperor Securities Ltd v SMI Investment (HK) Ltd and Others [2020] HKCFI 129 | ||||||||||||||||||||||||
| 6. English Court of Appeal: A commercial funder’s adverse costs liability is not limited to the extent of its funding | ||||||||||||||||||||||||
| Chapelgate Credit Opportunity Master Fund Ltd v Money and others [2020] EWCA Civ 246 | ||||||||||||||||||||||||
| 7. How to dispute an “indisputable” debt? Implied term can defeat a winding-up petition | ||||||||||||||||||||||||
| Re Golden Oasis Health Limited [2020] HKCFI 364 | ||||||||||||||||||||||||
| 8. Bank found in breach of its Quincecare duty of care for failing to make proper inquiry in light of the unusual circumstances surrounding the fraudulent payment instructions given by the director of the company | ||||||||||||||||||||||||
| Singularis Holdings Ltd (In Official Liquidation) v Daiwa Capital Markets Europe Ltd [2019] UKSC 50 | ||||||||||||||||||||||||
| 9. Liquidator’s firm that funded unsuccessful litigation ordered to pay costs of the successful party | ||||||||||||||||||||||||
| Burnden Holdings (UK) Ltd and another v Fielding and another [2019] EWHC 2995 (Ch) | ||||||||||||||||||||||||
| 10. Latest on the Lasmos approach on winding up petition and arbitration agreement | ||||||||||||||||||||||||
| Dayang (HK) Marine Shipping Co., Ltd v. Asia Master Logistics Ltd [2020] HKCFI 311 | ||||||||||||||||||||||||
| • | Cross-border Insolvency Cases | |||||||||||||||||||||||
| 11. Hong Kong Court reaffirmed that recognising and assisting foreign softtouch provisional liquidators are fully consistent with Hong Kong domestic insolvency law, private international law and cross-border insolvency policy | ||||||||||||||||||||||||
| Re The Joint Provisional Liquidators Of Moody Technology Holdings Ltd (滿地科技股份有限公司) (In Provisional Liquidation For Restructuring Purposes) [2020] HKCFI 416 | ||||||||||||||||||||||||
| 12. English Court: A foreign solvent liquidation would not be entitled to recognition under the UNCITRAL Model Law on Cross-Border Insolvency | ||||||||||||||||||||||||
| Re Sturgeon Central Asia Balanced Fund Ltd [2020] EWHC 123 (Ch) | ||||||||||||||||||||||||
| 13. English Court: Recognition of foreign insolvency proceedings may be granted notwithstanding the dissolution of the debtor in England and Wales | ||||||||||||||||||||||||
| Mendonca v KPMG Corporate Finance Sao Paulo, Brazil [2020] EWHC 351 (Ch) | ||||||||||||||||||||||||
| • | Restructuring Cases | |||||||||||||||||||||||
| 14. Hong Kong Court sanctioned a scheme of arrangement involving a PRC law governed debt | ||||||||||||||||||||||||
| Re China Lumena New Materials Corp. (In Provisional Liquidation) [2020] HKCFI 338 | ||||||||||||||||||||||||
| 15. The principal determinant of whether or not a scheme of arrangement is one that a creditor might reasonably be expected to accept is the alternative, which is highly likely to be the liquidation of the company | ||||||||||||||||||||||||
| National Arts Entertainment and Culture Group Ltd (In Provisional Liquidation for Restructuring Purposes) [2020] HKCFI 275 | ||||||||||||||||||||||||
| • | Corporate Disputes Cases | |||||||||||||||||||||||
| 16. How should the Court deal with urgent application for injunction to restrain rights issue that may have dilutive effect | ||||||||||||||||||||||||
| Fountain II ltd v Ping An Securities Group (Holdings) Ltd [2019] HKCFI 3013 | ||||||||||||||||||||||||
| 17. Is minority discount applicable for a minority shareholding in a non-quasipartnership company? Lights shed by Singapore Court | ||||||||||||||||||||||||
| Senda International Capital Ltd v Kiri Industries Ltd and others [2020] SGCA(I) 01 | ||||||||||||||||||||||||
| • | Bankruptcy Cases | |||||||||||||||||||||||
| 18. Petitioner held not have done all that was reasonable to bring the statutory demand to the attention of the debtor by merely advertising the statutory demand in Hong Kong and the Mainland for one day, where the debtor was not seen in Hong Kong for a considerable period of time and could not be found at his last known address in the Mainland | ||||||||||||||||||||||||
| Re Li Xiaoming (李晓明) [2020] HKCFI 361 | ||||||||||||||||||||||||
| 19. A trust claim for a fixed sum of money can constitute debt founding a statutory demand | ||||||||||||||||||||||||
| Re Lee Ming Cheung [2020] HKCFI 297 | ||||||||||||||||||||||||
| 20. Hong Kong Court has extraterritorial jurisdiction over a bankrupt’s assets situated overseas. This is so even if the beneficial ownership of the asset is disputed, as any such dispute is only likely to be treated as a subsidiary issue within the avoidance proceedings | ||||||||||||||||||||||||
| Chan Pui Sze and Mak Hau Yin (the Joint and Several Trustees of the Property of the Bankrupt) v Wang Jue [2019] HKCFI 2515 | ||||||||||||||||||||||||
| 21. The purpose of private examination pursuant to section 29 of the Bankruptcy Ordinance (Cap 6) is not confined to the recovery of assets | ||||||||||||||||||||||||
| Re Lee Siu Fung Siegfried (No 3) [2020] 1 HKLRD 694 | ||||||||||||||||||||||||
| 22. Creditors are entitled to a bankruptcy order if the conditions of the bankruptcy petition are fulfilled. Adjournments should only be made where there is credible evidence that the petitioning debt can be repaid in full within a reasonable time | ||||||||||||||||||||||||
| Gravesham Borough Council v Orebanwo [2020] EWHC 107 (Ch) | ||||||||||||||||||||||||