RE LEGEND INTERNATIONAL RESORTS LTD

RE LEGEND INTERNATIONAL RESORTS LTD

The court found on construction and the commercial context, following and applying the reasoning in Aikens J in Argo Fund, that MSEMI qualified as an Eligible Transferee and thus had locus to present the creditor's winding-up petition; the strike-out application failed. Although the court recognised it has jurisdiction to appoint provisional liquidators to facilitate restructuring, it exercised its discretion to refuse appointment here because a Philippine rehabilitation with a court-appointed receiver and stay was in place, the receiver was performing the necessary protective and evaluative functions, and there was no demonstrated useful purpose or urgent necessity for Hong Kong...

Citation
RE LEGEND INTERNATIONAL RESORTS LTD
Parties
Petitioner (creditor): Morgan Stanley Emerging Markets Inc.; Respondent (company): Legend International Resorts Limited; Interested Party / Parent Company: Metroplex Berhad; Official Receiver: Office of the Official Receiver; Rehabilitation Receiver (philippines): Cynthia L. Picazo
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
6 June 2005
Case Number
HCCW1139/2004
Procedural Posture
Companies (winding Up) / Interlocutory Applications: Summons to Appoint Provisional Liquidators and Summons to Strike Out Petition
Outcome
Strike-out summons by the Company dismissed; summons by MSEMI for appointment of provisional liquidators dismissed on discretionary grounds
Legal Topics
Provisional Liquidators, Winding Up Petition, Abuse of Process, Scheme of Arrangement (s166), Jurisdiction and Comity, Novation and Assignment
Source Language
EN
Insolvency Company Law Cross Border Insolvency Civil Procedure Provisional Liquidators Winding Up Petition Abuse of Process Scheme of Arrangement (s166) +2 more

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Parties

Morgan Stanley Emerging Markets Inc.

Petitioner (creditor)

Legend International Resorts Limited

Respondent (company)

Metroplex Berhad

Interested Party / Parent Company

Office of the Official Receiver

Official Receiver

Cynthia L. Picazo

Rehabilitation Receiver (philippines)

Procedural Posture

Companies (winding Up) / Interlocutory Applications: Summons to Appoint Provisional Liquidators and Summons to Strike Out Petition

Legal Issues

  1. 1 Whether MSEMI is a creditor with locus standi to present the winding-up petition arising from novation/assignment under the Facility Agreement
  2. 2 Whether the winding-up petition was presented for a collateral purpose or is an abuse of process
  3. 3 Whether the Hong Kong court has jurisdiction to appoint provisional liquidators to facilitate a corporate rescue or scheme of arrangement

Ratio Decidendi

The court found on construction and the commercial context, following and applying the reasoning in Aikens J in Argo Fund, that MSEMI qualified as an Eligible Transferee and thus had locus to present the creditor's winding-up petition; the strike-out application failed. Although the court recognised it has jurisdiction to appoint provisional liquidators to facilitate restructuring, it exercised its discretion to refuse appointment here because a Philippine rehabilitation with a court-appointed receiver and stay was in place, the receiver was performing the necessary protective and evaluative functions, and there was no demonstrated useful purpose or urgent necessity for Hong Kong...

Court Disposition

Strike-out summons by the Company dismissed; summons by MSEMI for appointment of provisional liquidators dismissed on discretionary grounds

Orders

  • Application by Morgan Stanley Emerging Markets Inc. for appointment of provisional liquidators dismissed
  • Application by Legend International Resorts Limited to strike out the winding-up petition dismissed