RE MIZUNO CORPORATION OF HONG KONG LTD

RE MIZUNO CORPORATION OF HONG KONG LTD

The court confirmed the reduction because a valid special resolution had been passed, the Company demonstrated solvency and sufficient assets and cash to meet liabilities, creditors’ interests were adequately safeguarded by the undertaking to set aside HK$1,140,361 and there was a discernible commercial purpose for the reduction, therefore the reduction would not prejudice creditors.

Citation
RE MIZUNO CORPORATION OF HONG KONG LTD
Parties
Petitioner/company: Mizuno Corporation of Hong Kong Limited; Majority Shareholder: Mizuno Corporation
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
18 December 2007
Case Number
HCMP2108/2007
Procedural Posture
Reduction of Capital Under Section 59 Companies Ordinance / Judgment (reasons for Judgment Handed Down)
Outcome
Court ordered confirmation of the proposed reduction of capital and approved the minute of order
Legal Topics
Reduction of Capital, Share Capital, Creditor Protection, Distribution to Shareholders
Source Language
EN
Company Law Corporate Restructuring Companies Ordinance Reduction of Capital Share Capital Creditor Protection Distribution to Shareholders

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Parties

Mizuno Corporation of Hong Kong Limited

Petitioner/company

Mizuno Corporation

Majority Shareholder

Procedural Posture

Reduction of Capital Under Section 59 Companies Ordinance / Judgment (reasons for Judgment Handed Down)

Legal Issues

  1. 1 Whether the proposed reduction of capital under section 59 of the Companies Ordinance should be confirmed
  2. 2 Whether the reduction would prejudice the Company's creditors and whether adequate protections were provided
  3. 3 Whether the statutory and procedural requirements for reducing share capital had been complied with

Ratio Decidendi

The court confirmed the reduction because a valid special resolution had been passed, the Company demonstrated solvency and sufficient assets and cash to meet liabilities, creditors’ interests were adequately safeguarded by the undertaking to set aside HK$1,140,361 and there was a discernible commercial purpose for the reduction, therefore the reduction would not prejudice creditors.

Court Disposition

Court ordered confirmation of the proposed reduction of capital and approved the minute of order

Orders

  • Order confirming reduction of authorised share capital from HK$65,000,000 to HK$32,500,000 and reducing nominal value of each share from HK$1.00 to HK$0.50
  • Order that the credit arising from the reduction be transferred to distributable reserve and distributed pro rata to members as proposed