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Re The Joint Provisional Liquidators Of Hsin Chong Group Holdings Ltd (Provisional Liquidators Appointed) (For Restructuring Purposes Only)

Judgment Cited authorities 4 Cited in 7 Precedent Map Related
Vincent
Judgment Date28 March 2019
Neutral Citation[2019] HKCFI 805
Judgement NumberHCMP313/2019
Subject MatterMiscellaneous Proceedings
CourtCourt of First Instance (Hong Kong)
HCMP313/2019 RE THE JOINT PROVISIONAL LIQUIDATORS OF HSIN CHONG GROUP HOLDINGS LTD (PROVISIONAL LIQUIDATORS APPOINTED) (FOR RESTRUCTURING PURPOSES ONLY)

HCMP 313/2019

[2019] HKCFI 805

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 313 OF 2019

________________

IN THE MATTER of Hsin Chong Group Holdings Limited (Provisional Liquidators appointed) (for restructuring purposes only)
and
IN THE MATTER of Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap 32) and the inherent jurisdiction of the Court

________________

BY
THE JOINT PROVISIONAL LIQUIDATORS OF HSIN CHONG GROUP HOLDINGS LIMITED
(PROVISIONAL LIQUIDATORS APPOINTED)
(FOR RESTRUCTURING PURPOSES ONLY) 		Applicants

________________

Before: Hon Harris J in Chambers
Date of Written Submissions: 7 March 2019
Date of Decision: 28 March 2019

________________

D E C I S I O N

________________

The application

1. Hsin Chong Group Holdings Ltd is incorporated in Bermuda and listed on the Main Board of The Stock Exchange of Hong Kong Limited (“Company”). Soft-touch joint provisional liquidators have been appointed in Bermuda (“JPLs”). The JPLs have applied for recognition and assistance by the Hong Kong High Court pursuant to a letter of request issued by the Honourable Chief Justice Hargun dated 28 February 2019. Such applications are increasingly common. The form of the order sought in the present case contains some provisions, which are not in the standard order and are required by the JPLs to progress a proposed restructuring, which will be carried out in Hong Kong. It is, therefore, useful for the me to summarise for the benefit of practitioners the principles by reference to which the court determines these applications and append to these reasons the order that I will grant.

What are the principles of recognition of foreign insolvency proceedings relevant to this application?

2. The law is well-settled that the Hong Kong court will recognise foreign insolvency proceedings that comply with the following criteria:

(1) the foreign insolvency proceedings are collective insolvency proceedings, such as a Cayman provisional liquidation (eg Re Joint Provisional Liquidators of China Lumena New Materials Corp[1]);

(2) the foreign insolvency proceedings are opened in the company’s country of incorporation (eg Re Joint Liquidators of Supreme Tycoon Ltd [2]).

3. Upon the foreign insolvency proceedings being recognised, the Hong Kong court will grant assistance to the foreign officeholders:

“In the case of liquidators appointed in jurisdictions with similar insolvency regimes to Hong Kong, the assistance may extend to granting orders that give the foreign liquidators substantially similar powers…” (Re Joint Liquidators of Supreme Tycoon Ltd.[3])

4. The assistance may include allowing the foreign officeholders to pursue restructuring options in Hong Kong (eg Re Z-Obee Holdings Ltd [4]).

5. As the law is well-settled, the Companies Court has developed a standard practice on applications for recognition orders and such applications may be granted very quickly on a written application:

“The increasing number of applications for recognition and assistance in recent years has allowed a form of order to emerge that this Court will generally be prepared to grant on written application made pursuant to a letter of request. Such applications can be granted very quickly. I note for the benefit of practitioners that although such applications are very familiar to me, they will not necessarily be familiar to other judges who hear company matters, and applications should comply with Practice Direction 3.5 and be accompanied by a paginated and indexed hearing bundle to assist the court in processing them quickly.” (Re Joint and Several Liquidators of Pacific Andes Enterprises (BVI) Ltd.[5])

6. To help facilitate the grant of recognition orders on the papers, the Companies Court has also provided a standard-form order to guide applicants, as set out in Re Joint and Several Liquidators of Pacific Andes Enterprises (BVI) Ltd.[6]

The order sought is consistent with the conventional recognition practice developed by the Companies Court

7. As the Company is in provisional liquidation in Bermuda, the recognition of the Company’s proceedings in Bermuda is consistent with the existing Companies Court’s practice.

8. Subject to what I say in [9], the powers sought by the JPLs are consistent with the standard recognition order set out in Re Joint and Several Liquidators of Pacific Andes Enterprises (BVI) Ltd.[7]

Order

9. The powers in sub-paras 2(i)–2(vi) of the order sought are not in the standard order and are required for the purposes of the restructuring. They are specifically requested in the letter of request. For the reasons explained in my decision in ...

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