RE TA THERAPEUTICS LTD

RE TA THERAPEUTICS LTD

The petition is granted because the proposed reduction serves a clear commercial purpose (implementation of the restructuring agreement), the position of creditors is adequately protected by the Company's undertaking to deposit a Trust Amount equal to projected creditor liabilities into a segregated account and by sufficient available cash and assets, and there are special circumstances to dispense with section 59(2), therefore the court properly exercises its discretion to confirm the reduction.

Citation
RE TA THERAPEUTICS LTD
Parties
Petitioner: TA Therapeutics Limited; Member (subject of Reduction): Biotechnology Research Corporation Limited; Member (consenting Member): Geron Corporation
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
25 October 2007
Case Number
HCMP1418/2007
Procedural Posture
Companies Reduction of Capital Petition (section 59) / Hearing and Judgment (reasons for Judgment Handed Down)
Outcome
Order confirming the proposed reduction of the liability of Biotechnology Research Corporation Limited to pay US$5,000,000 of the share premium
Legal Topics
Reduction of Share Capital, Share Premium, Creditor Protection, Undertaking/trust Account, Restructuring Agreement
Source Language
EN
Company Law Commercial Law Civil Procedure Reduction of Share Capital Share Premium Creditor Protection Undertaking/trust Account Restructuring Agreement

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Parties

TA Therapeutics Limited

Petitioner

Biotechnology Research Corporation Limited

Member (subject of Reduction)

Geron Corporation

Member (consenting Member)

Procedural Posture

Companies Reduction of Capital Petition (section 59) / Hearing and Judgment (reasons for Judgment Handed Down)

Legal Issues

  1. 1 Whether the court should confirm a proposed reduction of called but unpaid share premium under section 59 of the Companies Ordinance
  2. 2 Whether creditors are adequately protected such that the court may dispense with the requirements of section 59(2)
  3. 3 Whether the proposed reduction has a discernable purpose and is equitable to members

Ratio Decidendi

The petition is granted because the proposed reduction serves a clear commercial purpose (implementation of the restructuring agreement), the position of creditors is adequately protected by the Company's undertaking to deposit a Trust Amount equal to projected creditor liabilities into a segregated account and by sufficient available cash and assets, and there are special circumstances to dispense with section 59(2), therefore the court properly exercises its discretion to confirm the reduction.

Court Disposition

Order confirming the proposed reduction of the liability of Biotechnology Research Corporation Limited to pay US$5,000,000 of the share premium

Orders

  • Order confirming reduction of the share premium payable on BRC's partly paid share from US$6,999,999.00 to US$1,999,999.00 (a diminution of liability of US$5,000,000.00)
  • Section 59(2) of the Companies Ordinance dispensed with in this case