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Re The Joint And Several Provisional Liquidators Of Rare Earth Magnesium Technology Group Holdings Ltd (In Provisional Liquidation In Bermuda)

Judgment Cited authorities 7 Cited in 1 Precedent Map Related
Vincent
Judgment Date03 September 2020
Neutral Citation[2020] HKCFI 2260
Year2020
Judgement NumberHCMP1274/2020
Subject MatterMiscellaneous Proceedings
CourtCourt of First Instance (Hong Kong)
HCMP1274/2020 RE THE JOINT AND SEVERAL PROVISIONAL LIQUIDATORS OF RARE EARTH MAGNESIUM TECHNOLOGY GROUP HOLDINGS LTD (IN PROVISIONAL LIQUIDATION IN BERMUDA)

HCMP 1274/2020

[2020] HKCFI 2260

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1274 OF 2020

________________

IN THE MATTER OF Rare Earth Magnesium Technology Group Holdings Limited (In Provisional Liquidation in Bermuda)

and
IN THE MATTER OF the inherent jurisdiction of the Court

________________

BY
THE JOINT AND SEVERAL PROVISIONAL Applicants
LIQUIDATORS OF RARE EARTH MAGNESIUM
TECHNOLOGY GROUP HOLDINGS LIMITED
(IN PROVISIONAL LIQUIDATION IN BERMUDA)

________________

Before: Hon Harris J in Chambers
Date of Written Submission by the Applicants: 21 August 2020
Date of Decision: 25 August 2020
Date of Reasons for Decision: 3 September 2020

_________________________________

REASONS FOR DECISION

_________________________________

1. I have before me an originating summons issued by the joint provisional liquidators of the Company appointed in Bermuda for recognition and assistance in Hong Kong.

2. The application itself is of a sort that has become common in Hong Kong in recent years. The company is incorporated in Bermuda, listed on the Main Board of the Hong Kong Stock Exchange and has its principal business activities and assets located in the Mainland.

3. The application is supported by a letter of request which has been helpfully drafted in a form consistent with the Hong Kong court’s standard form of order for recognition and assistance. It is not necessary for me to discuss the relevant principles as these have been explained in detail in a number of recent decisions [1].

4. Not all applications result in reported reasons. In this case I consider it is helpful to produce short reasons in order to append to them the form of order that has been made. It differs in a number of respects from the standard order. The reason for this is primarily to reflect the terms of the order appointing the provisional liquidators in Bermuda.

5. That order reflects the fact that the provisional liquidators have been appointed on a soft-touch basis and in order to facilitate the introduction by the Company of a restructuring of its debt. The order does not provide for the wholesale passing to the provisional liquidators of the control of the Company taking it out of hands of the directors, instead in a number of respects the board remains in control of the Company. As a consequence paragraphs 2(k), 2(m) and 2(n) confer powers which can only be exercised with the consent of the Company. In addition, paragraph 2(q) is new and provides expressly that the provisional liquidators should receive advance notice and materials in respect of significant commercial transactions that the board proposes to introduce.

(Jonathan Harris)
Judge of the Court of First Instance
High Court

Mr Look Chan Ho, instructed by Gall, for the Applicants

Appendix

Order

1. The provisional liquidation of Rare Earth Magnesium Technology Group Holdings Limited (in provisional liquidation in Bermuda) (“Company”) and the appointment of Ms So Kit Yee Anita of Ernst & Young Transactions Limited, 22nd Floor, CITIC Tower, 1 Tim Mei Avenue, Central, Hong Kong, Mr Roy Bailey of Ernst & Young Ltd, 4th Floor, Ritter House, Wickhams Cay 2, Road Town, Tortola, British Virgin Islands VG1110, and Ms Tammy Karina Fu of EY Cayman Ltd, 62 Forum Lane, Camana Bay, P.O. Box 510, Grand Cayman KY11106, Cayman Islands, as Joint Provisional Liquidators of the Company for restructuring purposes (“JPLs”), pursuant to the Order of the Supreme Court of Bermuda dated 16 July 2020, be recognised by this Court;

2. The JPLs have and may exercise in the Hong Kong Special Administrative Region the following powers:

(a) to develop and propose a restructuring of the Company’s indebtedness in a manner designed to allow the Company to continue as a going concern, with a view to making a compromise or arrangement...

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