RE CIL HOLDINGS LTD

RE CIL HOLDINGS LTD

A vote to adjourn does not amount to a rejection of the substantive resolution and an adjourned meeting is a continuation of the original meeting; accordingly the reconvened meeting on 20 December 2002 was valid without a new court order. The Excluded Claimants' legal rights were not affected by the Amended Scheme because the Company's status and available asset pool were not diminished and payments to Scheme Creditors were to be funded solely by the Subscriber's subscription; therefore the court had jurisdiction and in the exercise of its discretion sanctioned the Amended Scheme on the Subscriber's undertaking.

Citation
RE CIL HOLDINGS LTD
Parties
Petitioner/company: CIL Holdings Limited; Scheme Creditors: Scheme Creditors; Excluded Claimants: Excluded Claimants; Subscriber: Trade Honour Limited; Creditor (major Creditor): Amsteel Corporation Berhad
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
2 April 2003
Case Number
HCMP2799/2002
Procedural Posture
Scheme of Arrangement (section 166 Companies Ordinance) / Sanction Hearing; Judgment Delivered
Outcome
Order sanctioning the Amended Scheme under section 166 of the Companies Ordinance.
Legal Topics
Scheme of Arrangement, Section 166 Companies Ordinance, Creditor Meetings and Voting, Adjournment Effect on Votes, Excluded Creditors and Jurisdiction
Source Language
EN
Company Law Insolvency Law Civil Procedure Scheme of Arrangement Section 166 Companies Ordinance Creditor Meetings and Voting Adjournment Effect on Votes Excluded Creditors and Jurisdiction

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Parties

CIL Holdings Limited

Petitioner/company

Scheme Creditors

Scheme Creditors

Excluded Claimants

Excluded Claimants

Trade Honour Limited

Subscriber

Amsteel Corporation Berhad

Creditor (major Creditor)

Procedural Posture

Scheme of Arrangement (section 166 Companies Ordinance) / Sanction Hearing; Judgment Delivered

Legal Issues

  1. 1 Whether a vote to adjourn a creditors' meeting constitutes a rejection of the proposed scheme
  2. 2 Whether the court has jurisdiction to sanction a scheme when certain creditors are excluded from voting
  3. 3 Whether the legal rights of excluded creditors are affected by the Amended Scheme

Ratio Decidendi

A vote to adjourn does not amount to a rejection of the substantive resolution and an adjourned meeting is a continuation of the original meeting; accordingly the reconvened meeting on 20 December 2002 was valid without a new court order. The Excluded Claimants' legal rights were not affected by the Amended Scheme because the Company's status and available asset pool were not diminished and payments to Scheme Creditors were to be funded solely by the Subscriber's subscription; therefore the court had jurisdiction and in the exercise of its discretion sanctioned the Amended Scheme on the Subscriber's undertaking.

Court Disposition

Order sanctioning the Amended Scheme under section 166 of the Companies Ordinance.

Orders

  • Amended Scheme sanctioned on the undertaking of the Subscriber to be bound by the terms of the Amended Scheme and to execute such acts and documents as necessary to give effect to the Amended Scheme