RE TEXXAN INDUSTRIES LTD

RE TEXXAN INDUSTRIES LTD

There was a prima facie case for winding-up but no evidence of jeopardy to assets or of proven misconduct by the liquidators; allegations of apparent bias could not be resolved on affidavits alone and, on the balance of convenience (considering work done, majority creditors' decision and risk of wasted costs), the court would not appoint a provisional liquidator or displace the voluntary liquidators; applications dismissed.

Citation
RE TEXXAN INDUSTRIES LTD
Parties
Petitioner: John Koon; Company (respondent): Texxan Industries Limited (In Voluntary Liquidation); Company (respondent): Chino Industries Limited (In Voluntary Liquidation); Joint Liquidators: M.C. Nacson and E.M. McMillan (Arthur Andersen); Opposing Shareholder/creditor Group: Yue Xiu group; Official Receiver/interested Party: Official Receiver; Supporting Creditor: Security Pacific Asian Bank; Supporting Creditor: Hongkong & Shanghai Bank / Hongkong & Shanghai Insurance Ltd.; Supporting Creditor: Nanyang Commercial Bank Ltd.; Opposing Creditors: Opposing creditors represented by Lovell White Durrant
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
5 July 1990
Case Number
HCCW151/1990
Procedural Posture
Companies (winding Up) / Petition for Compulsory Winding Up / Interlocutory Application for Appointment of Provisional Liquidator and to Vacate Trial Dates (pre Trial)
Outcome
Applications for appointment of provisional liquidator dismissed; summonses to vacate trial dates and have petitions heard in vacation refused.
Legal Topics
Appointment of Provisional Liquidator, Conflict of Interest and Apparent Bias, Voluntary Vs Compulsory Winding Up, Jurisdiction Under Statute, Balance of Convenience
Source Language
EN
Company Law Insolvency Law Civil Procedure Appointment of Provisional Liquidator Conflict of Interest and Apparent Bias Voluntary Vs Compulsory Winding Up Jurisdiction Under Statute Balance of Convenience

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 4 Authorities cited 16 Party arguments 2 Amounts and remedies 8
Sign in to unlock

Parties

John Koon

Petitioner

Texxan Industries Limited (In Voluntary Liquidation)

Company (respondent)

Chino Industries Limited (In Voluntary Liquidation)

Company (respondent)

M.C. Nacson and E.M. McMillan (Arthur Andersen)

Joint Liquidators

Yue Xiu group

Opposing Shareholder/creditor Group

Official Receiver

Official Receiver/interested Party

Security Pacific Asian Bank

Supporting Creditor

Hongkong & Shanghai Bank / Hongkong & Shanghai Insurance Ltd.

Supporting Creditor

Nanyang Commercial Bank Ltd.

Supporting Creditor

Opposing creditors represented by Lovell White Durrant

Opposing Creditors

Procedural Posture

Companies (winding Up) / Petition for Compulsory Winding Up / Interlocutory Application for Appointment of Provisional Liquidator and to Vacate Trial Dates (pre Trial)

Legal Issues

  1. 1 Whether the court should appoint a provisional liquidator under section 193 of the Companies Ordinance notwithstanding existing voluntary liquidators
  2. 2 Whether the joint liquidators should be removed for apparent bias or conflict of interest arising from pre-appointment advisory work for a major creditor/shareholder group
  3. 3 Whether the petitions should be heard during the long vacation and/or trial dates vacated

Ratio Decidendi

There was a prima facie case for winding-up but no evidence of jeopardy to assets or of proven misconduct by the liquidators; allegations of apparent bias could not be resolved on affidavits alone and, on the balance of convenience (considering work done, majority creditors' decision and risk of wasted costs), the court would not appoint a provisional liquidator or displace the voluntary liquidators; applications dismissed.

Court Disposition

Applications for appointment of provisional liquidator dismissed; summonses to vacate trial dates and have petitions heard in vacation refused.

Orders

  • Dismissed summonses for appointment of Official Receiver or other provisional liquidator in CWU 151 of 1990 and CWU 152 of 1990.
  • Refused applications to vacate trial dates/hear petitions during long vacation; directions given for filing further evidence and trial fixed in December.