Re Lehman Brothers Futures Asia Ltd

CourtHigh Court (Hong Kong)
Judgment Date25 August 2009
Citation[2010] 1 HKLRD 43
Judgement NumberHCCW441/2008
Subject MatterCompanies Winding-up Proceedings
HCCW000437/2008 RE LEHMAN BROTHERS SECURITIES ASIA LTD

HCCW 437/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) NO. 437 OF 2008

____________

IN THE MATTER of LEHMAN BROTHERS SECURITIES ASIA LIMITED
and
IN THE MATTER of the Companies Ordinance, Cap. 32

____________

AND

HCCW 438/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) NO. 438 OF 2008

____________

IN THE MATTER of LEHMAN BROTHERS FUTURES ASIA LIMITED
and
IN THE MATTER of the Companies Ordinance, Cap. 32

____________

AND

HCCW 441/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) NO. 441 OF 2008

____________

IN THE MATTER of LEHMAN BROTHERS FUTURES ASIA LIMITED
and
IN THE MATTER of the Companies Ordinance, Cap. 32

____________

AND

HCCW 442/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) NO. 442 OF 2008

____________

IN THE MATTER of LEHMAN BROTHERS ASIA LIMITED
and
IN THE MATTER of the Companies Ordinance, Cap. 32

____________

AND

HCCW 443/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) NO. 443 OF 2008

____________

IN THE MATTER of LEHMAN BROTHERS ASIA HOLDING LIMITED
and
IN THE MATTER of the Companies Ordinance, Cap. 32

____________

AND

HCCW 452/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) NO. 452 OF 2008

____________

IN THE MATTER of LEHMAN BROTHERS FUTURES ASIA LIMITED
and
IN THE MATTER of the Companies Ordinance, Cap. 32

____________

AND

HCCW 463/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) NO. 463 OF 2008

____________

IN THE MATTER of LEHMAN BROTHERS FUTURES ASIA LIMITED
and
IN THE MATTER of the Companies Ordinance, Cap. 32

____________

AND

HCCW 464/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) NO. 464 OF 2008

____________

IN THE MATTER of LEHMAN BROTHERS FUTURES ASIA LIMITED
and
IN THE MATTER of the Companies Ordinance, Cap. 32

____________

(Heard Together)

Before: Hon Barma J in Chambers

Date of Hearing: 26 May 2009

Date of Decision: 26 May 2009

Date of Handing Down Reasons for Decision: 25 August 2009

_____________________________________________

REASONS FOR DECISION

_____________________________________________

Introduction

1. In September 2008, petitions were presented for the winding up of eight Hong Kong companies in the Lehman Brothers group of companies pursuant to section 179(1) of the Companies Ordinance (Cap. 32) (“the Ordinance”), namely Lehman Brothers Securities Asia Limited (“LBSA”), Lehman Brothers Futures Asia Limited (“LBFA”), Lehman Brothers Commercial Corporation Asia Limited (“LBCCA”), Lehman Brothers Asia Limited (“LBA”), Lehman Brothers Asia Holdings Limited (“LBAH”), Lehman Brothers Asia Capital Company (“LBACC”) LBQ Hong Kong Funding Limited (“LBQ”) and Lehman Brothers Nominees (H.K.) Limited (“LBN”). I shall refer to them collectively as “the Companies”. The petitions were presented either by the Companies themselves or by their parent companies as a result of the financial difficulties in which the Lehman Brothers group found itself as a result of the financial crisis that developed in the later part of 2008.

2. When the petitions were presented, ex parte applications were also made for the appointment of provisional liquidators pursuant to section 193 of the Ordinance. Messrs Paul Brough, Edward Middleton and Patrick Cowley, partners of Messrs KPMG, Certified Public Accountants, were appointed joint and several provisional liquidators of each of the Companies, with the exception of LBQ and LBN, in respect of whom only Messrs Middleton and Cowley were appointed as joint and several provisional liquidators. I shall refer to them as “the Provisional Liquidators”.

3. Paragraph 3(20)(a) of each of the orders by which they were appointed empowered the Provisional Liquidators to employ clerks, servants, employees, managers and agents including foreign agents for the purpose of exercising the powers conferred on them by such orders, to do so on such terms as to remuneration or otherwise as they thought fit. Paragraph 3(20)(b) of the orders authorised them to defray the costs of doing so out of the assets of whichever of the Companies was relevant. Paragraph 3(20)(d) permitted them to engage professionals, such as accountants, surveyors, attorneys, barristers, solicitors, financial advisers, stockbrokers or other agents as they thought necessary, whether in Hong Kong or elsewhere.

4. So far as their own remuneration was concerned, paragraph 6 of the orders provided that “Subject to the approval of the court, [their] remuneration … be charged on a time-costs basis and be paid out of the assets of [the relevant company]”.

5. In November 2008, winding up orders were made in respect of each of the Companies, and the Provisional Liquidators continued to act as provisional liquidators by virtue of section 194(1)(aa) of the Ordinance, pending the appointment of liquidators.

6. During the course of February 2009, meetings of creditors and contributories of each of the Companies were held, at which the Provisional Liquidators were appointed liquidators, and committees of inspection were proposed to be appointed in respect of each of the Companies, apart from LBQ and LBN. Thereafter, during March 2009, orders were made by the court appointing the Provisional Liquidators as liquidators of each of the Companies.

These applications

7. On 24 March 2009, the Provisional Liquidators issued a summons in each liquidation seeking directions in relation to their remuneration and disbursements (in particular the remuneration of agents appointed by them, such as their legal and other advisers). Directions were sought as to the manner in which such remuneration and disbursements should be assessed, for the actual assessment of such remuneration and disbursements, and for the payment out of such remuneration and disbursement from the estate of the relevant company. Directions were also sought as to the making of interim payments in respect of such remuneration and disbursements, pending their final assessment, and as to the costs of the applications.

The hearing of 27 March 2009

8. On 27 March 2009, an initial directions hearing was held. It was directed that the applications should be dealt with in stages, with two further hearings fixed. The first such hearing was to be heard on 26 May 2009, and was to deal only with the application for an interim payment in respect of the Provisional Liquidators’ remuneration and their disbursements (principally the remuneration of their agents). The second, to be heard on 12 June 2009, would deal with questions of principle as to the basis on which such remuneration should be assessed, as the Provisional Liquidators and their legal advisers considered that there was some doubt as to the relevant approach to be adopted (in particular, whether the correct approach was that identified in cases such as Re Peregrine Investments Holdings Ltd (No. 1) [1999] 3 HKC 1, whereby the assessment was one to be done by the court in the exercise of its inherent jurisdiction, or whether such assessment was to take place pursuant to section 196(2) of the Ordinance and relevant provisions in the Winding Up Rules (Cap. 32H) (“the Rules”) and in accordance with the Procedural Guides for the Taxation of Bills of Provisional Liquidators and Liquidators by Masters and of Bills (other than Bills of Provisional Liquidators and Liquidators) before Taxing Officers (“the Procedural Guides”)), and would also give consideration to the manner in which such assessment should take place (whether by a judge or a master, and in either case whether with or without the assistance of an assessor).

This hearing

9. This was the first of these hearings. At the end of...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT