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Re Bg Lighting Co. Ltd.

Judgment Cited in Precedent Map Related
Vincent
Judgment Date22 May 2000
CourtHigh Court (Hong Kong)
Judgement NumberHCCW3/2000
Subject MatterCompanies Winding-up Proceedings
HCCW000003/2000 Re BG Lighting Co. Ltd.

HCCW000003/2000

HCCW3/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES WINDING-UP PROCEEDINGS NO.3 OF 2000

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IN THE MATTER OF the Companies Ordinance, Cap.32

and

IN THE MATTER OF BG Lighting Company Limited

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AND

HCCW38/2000

COMPANIES WINDING-UP PROCEEDINGS NO.38 OF 2000

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IN THE MATTER OF the Companies Ordinance, Cap.32

and

IN THE MATTER OF BG International Limited

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Coram : Hon Le Pichon J in Court

Date of Hearing: 22 May 2000

Date of Order: 22 May 2000

Reasons Handed Down: 24 May 2000

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R E A S O N S

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1. These are creditors' petitions. The first is a petition presented on 4 January 2000 against BG Lighting Company Limited ("Lighting"). The underlying debt is based on a Labour Tribunal award for arrears of wages in the sum of approximately $270,000. The other petition was presented on 12 January 2000 against BG International Limited ("International"). The underlying debt is also based on a Labour Tribunal award. The amount of the award was approximately $32,000. Lighting and International (collectively "the Group") are related companies and were represented by its common director Mr Wong Pak Sum. The two petitions were heard together and winding-up orders were made at the hearing on 22 May 2000. The reasons appear below.

2. The petition relating to Lighting first came before me on 20 March 2000. At that hearing, Mr Wong informed the court that it had appointed Horwath Corporate Solutions Limited ("Horwath") to formulate a restructuring proposal and to look for new investors. A letter dated 10 January 2000 from Horwath was exhibited in which Horwath confirmed their appointment as the independent financial adviser of Lighting and stated that their advisory role included the formulation of a restructuring plan which would be presented to the board for consideration as soon as possible. That letter was by then some nine weeks old. Yet, there was no evidence of any progress having been made. At that hearing, Lighting sought and was granted an adjournment of four weeks to present its restructuring proposal and the in-principle support of the majority of its creditors. The need for legal representation should it proceed with a restructuring was brought to Lighting's attention. Given the technicalities that a restructuring would involve, it was simply not realistic for Lighting to believe that a restructuring could be accomplished without legal assistance.

3. Lighting did not engage solicitors, probably due to a lack of financial resources. On 14 April 2000, Mr Wong filed written submissions on behalf of Lighting seeking a dismissal of the petition. Similar submissions were filed for International which also came before me on 17 April 2000. Attached to those submissions was a draft letter from Horwath to one of the bank creditors of Lighting dated 10 April 2000 stating that there had been a delay but that the Group's management accounts for the years ended 31 March 1999 and 2000 were expected to be available before 30 April 2000 and 22 May 2000 respectively. On this basis, Horwath stated that they anticipated being able to present the restructuring plan for the Group by mid-June 2000. There was also a list of creditors showing the Group's indebtedness to be of the order of $46.4 million. Mr Wong did not attend the adjourned hearing which took place on 17 April 2000. He was apparently in Italy seeking investors and was not due to return to Hong Kong until 19 April.

4. At the adjourned hearing on 17 April, the Group was represented by another director, namely Madam Fu Yuk Sum, who sought a further adjournment. The Group was told in no uncertain terms that unless a viable restructuring plan which had the necessary in-principle support was before the court at the further adjourned hearing on 15 May 2000, it faced the prospect of winding-up orders. Moreover, it was made plain to the Group that it was not in a position to insist that a restructuring plan would not be submitted until mid-June given the petitions.

5. At the hearing on 15 May, the position had not changed : no restructuring plan was before the court although a letter was produced from the Bank of China, allegedly the largest creditor of the Group, that it agreed to an adjournment until mid-June for Horwath's report. On 15 May, the Group was given one last opportunity to place the requisite evidence before the court.

6. At the hearing on 22 May, the Group produced letters from a number of its creditors whose debts in the aggregate amounted to some $31.6 million. In the...

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