RE: AU WAI YING

RE: AU WAI YING

Section 20K(2) is properly read as applying to the implementation and supervision of voluntary arrangements that have taken effect; it does not extend to arrangements not yet approved. The nominee must exercise her own judgment and discretion when confronted with contradictory proxy instructions and may refuse to accept or act on such proxies. The court will not supplant the nominee's functions but will grant limited directions and procedural relief as appropriate.

Citation
RE: AU WAI YING
Parties
Debtor: AU WAI YING; Nominee: Nominee; Creditor: AIG Credit Card Company (Hong Kong) Limited; Creditor: H.S.B.C.; Creditor: Promise (Hong Kong) Company Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
22 August 2006
Case Number
HCBI322/2006
Procedural Posture
Bankruptcy Interim Order Application (individual Voluntary Arrangement) / Application for Directions Under Section 20 K(2) Bo; Interim Order, Hearing and Reserved Decision
Outcome
Application allowed in principle insofar as limited directions and procedural relief were appropriate; broader directions under section 20K(2) beyond implementation and supervision of approved arrangements were not granted; no order as to costs.
Legal Topics
Individual Voluntary Arrangement, Nominee Duties and Supervision, Proxy Voting, Court Directions Under Section 20 K, Interpretation of Bankruptcy Rules
Source Language
EN
Bankruptcy Law Insolvency Civil Procedure Individual Voluntary Arrangement Nominee Duties and Supervision Proxy Voting Court Directions Under Section 20 K Interpretation of Bankruptcy Rules

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Parties

AU WAI YING

Debtor

Nominee

Nominee

AIG Credit Card Company (Hong Kong) Limited

Creditor

H.S.B.C.

Creditor

Promise (Hong Kong) Company Limited

Creditor

Procedural Posture

Bankruptcy Interim Order Application (individual Voluntary Arrangement) / Application for Directions Under Section 20 K(2) Bo; Interim Order, Hearing and Reserved Decision

Legal Issues

  1. 1 Whether section 20K(2) of the Bankruptcy Ordinance applies to voluntary arrangements not yet approved by creditors
  2. 2 Whether the nominee should seek court directions or exercise discretion when faced with contradictory proxy instructions
  3. 3 Whether AIG's proxy conditions contravene Rules 122T(2) and/or 122R(2) of the Bankruptcy Rules

Ratio Decidendi

Section 20K(2) is properly read as applying to the implementation and supervision of voluntary arrangements that have taken effect; it does not extend to arrangements not yet approved. The nominee must exercise her own judgment and discretion when confronted with contradictory proxy instructions and may refuse to accept or act on such proxies. The court will not supplant the nominee's functions but will grant limited directions and procedural relief as appropriate.

Court Disposition

Application allowed in principle insofar as limited directions and procedural relief were appropriate; broader directions under section 20K(2) beyond implementation and supervision of approved arrangements were not granted; no order as to costs.

Orders

  • Extend the period for holding the creditors meeting under R122S(2) of the Bankruptcy Rules by 14 days from the date of decision
  • Extend the interim order to 17 October 2006