Re Everpoint Co. Ltd.

Re Everpoint Co. Ltd.

The court applied the rights-based test for class constitution and held that inclusion of internal creditors did not produce confiscation or injustice; disputed claims legitimately valued at nil after review may be excluded from voting; technical irregularities were waivable; given substantial independent creditor support and preservation of preferential/security rights, the court exercises its discretion to sanction the 25 Schemes, subject to fulfillment of the Stock Exchange approval condition precedent.

Citation
Re Everpoint Co. Ltd.
Parties
Petitioner: UDL Holdings Limited; Petitioner: UDL Argos Engineering & Heavy Industries Co. Ltd; Petitioner: Everpoint Company Limited; Petitioner: Econo Plant Hire Company Limited; Petitioner: East Coast Towing Limited; Petitioner: Universal Dockyard Limited; Petitioner: UDL Ship Management Limited; Petitioner: UDL Marine Pte Limited; Petitioner: UDL Marine Operation Limited; Petitioner: UDL Contracting Limited; Petitioner: UDL Civil Contractors Limited; Petitioner: UDL Employment Services Limited; Petitioner: Wellful Time Limited; Petitioner: UDL Steel Fabricators & Shipbuilders Company Limited; Petitioner: UDL Management Limited; Petitioner: UDL Investment Limited; Petitioner: UDL E & M (BVI) Limited; Petitioner: UDL Dredging Limited; Petitioner: S.K. LUK Construction Company Limited; Petitioner: Keen Yield Investment Limited; Petitioner: Graceful Ease Investment Limited; Petitioner: Full Keen Investment Limited; Petitioner: Faith On International Limited; Petitioner: Fairking Transportation Limited; Petitioner: Exact Profit Limited; Objector / Disputed Creditor: Nishimatsu Construction Company Limited; Objector / Preferential Creditors: Opposing Preferential Creditors (represented by Director of Legal Aid); Creditor (bond Issuer/indemnity Claimant): American Home Assurance Company (AHAC); Creditor / Petitioner in Earlier Proceedings: HSBC (presented winding up petition but did not appear)
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
18 April 2000
Case Number
HCMP410/2000
Procedural Posture
Scheme of Arrangement Petitions Under the Companies Ordinance (chapter 32) / Sanction Hearing (court of First Instance)
Outcome
The court sanctioned all 25 Schemes of Arrangement (sanction granted) subject to the condition precedent of Stock Exchange approval by 30 April 2000 or such later date as the court may allow; costs reserved.
Legal Topics
Scheme of Arrangement, Creditor Classification, Voting at Creditors' Meetings, Disputed Claims Valuation, Preferential Creditors, Court Discretion to Sanction
Source Language
EN
Company Law Insolvency Law Civil Procedure Scheme of Arrangement Creditor Classification Voting at Creditors' Meetings Disputed Claims Valuation Preferential Creditors +1 more

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Parties

UDL Holdings Limited

Petitioner

UDL Argos Engineering & Heavy Industries Co. Ltd

Petitioner

Everpoint Company Limited

Petitioner

Econo Plant Hire Company Limited

Petitioner

East Coast Towing Limited

Petitioner

Universal Dockyard Limited

Petitioner

UDL Ship Management Limited

Petitioner

UDL Marine Pte Limited

Petitioner

UDL Marine Operation Limited

Petitioner

UDL Contracting Limited

Petitioner

UDL Civil Contractors Limited

Petitioner

UDL Employment Services Limited

Petitioner

Wellful Time Limited

Petitioner

UDL Steel Fabricators & Shipbuilders Company Limited

Petitioner

UDL Management Limited

Petitioner

UDL Investment Limited

Petitioner

UDL E & M (BVI) Limited

Petitioner

UDL Dredging Limited

Petitioner

S.K. LUK Construction Company Limited

Petitioner

Keen Yield Investment Limited

Petitioner

Graceful Ease Investment Limited

Petitioner

Full Keen Investment Limited

Petitioner

Faith On International Limited

Petitioner

Fairking Transportation Limited

Petitioner

Exact Profit Limited

Petitioner

Nishimatsu Construction Company Limited

Objector / Disputed Creditor

Opposing Preferential Creditors (represented by Director of Legal Aid)

Objector / Preferential Creditors

American Home Assurance Company (AHAC)

Creditor (bond Issuer/indemnity Claimant)

HSBC (presented winding up petition but did not appear)

Creditor / Petitioner in Earlier Proceedings

Procedural Posture

Scheme of Arrangement Petitions Under the Companies Ordinance (chapter 32) / Sanction Hearing (court of First Instance)

Legal Issues

  1. 1 Whether classes of creditors were properly constituted for the purposes of s.166(2) Cap.32 (in particular treatment of internal creditors)
  2. 2 Whether disputed claims (notably Nishimatsu) may be excluded or valued at nil for voting purposes
  3. 3 Whether irregularities at meetings vitiate the meetings or should be waived

Ratio Decidendi

The court applied the rights-based test for class constitution and held that inclusion of internal creditors did not produce confiscation or injustice; disputed claims legitimately valued at nil after review may be excluded from voting; technical irregularities were waivable; given substantial independent creditor support and preservation of preferential/security rights, the court exercises its discretion to sanction the 25 Schemes, subject to fulfillment of the Stock Exchange approval condition precedent.

Court Disposition

The court sanctioned all 25 Schemes of Arrangement (sanction granted) subject to the condition precedent of Stock Exchange approval by 30 April 2000 or such later date as the court may allow; costs reserved.

Orders

  • Sanction granted to the 25 Schemes of Arrangement conditional upon Stock Exchange approval by 30 April 2000 or such later date as the court may allow
  • Court waives the identified technical irregularities in meetings (Econo Plant Hire and S.K. Luk Construction)