RE JINRO (HK) INTERNATIONAL LTD

RE JINRO (HK) INTERNATIONAL LTD

The court sanctioned the Scheme because the statutory requisites were satisfied: the meeting was properly convened and informed, the Scheme Creditors formed a proper single class by reason of their dual recourse, the requisite majority voted in favour, Single Recourse Creditors were not detrimentally affected and...

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Citation
RE JINRO (HK) INTERNATIONAL LTD
Parties
Petitioner / Company (acting by Provisional Liquidators): Jinro (H.K.) International Limited; Provisional Liquidators for the Company: Provisional Liquidators; Parent Company / Guarantor / Related Party: Jinro Limited (Jinro Korea); Subsidiary / Asset in Dispute: Jinro Japan Inc.; Class of Creditors (holders of Notes and Pusan Debt Guaranteed by Jinro Korea): Scheme Creditors; Other Unsecured Creditors With Recourse Only to the Company: Single Recourse Creditors
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
3 August 2004
Case Number
HCMP1503/2004
Procedural Posture
Scheme of Arrangement Under Companies Ordinance (cap. 32) / Sanction Hearing / Judgment (scheme Sanctioned)
Outcome
Scheme sanctioned as modified
Legal Topics
Scheme of Arrangement, Class Composition, Provisional Liquidation, Restructuring Plan, Interlocking Cross Border M&a
Source Language
en
Companies Law Insolvency Cross Border Restructuring Scheme of Arrangement Class Composition Provisional Liquidation Restructuring Plan Interlocking Cross Border M&a

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Parties

Jinro (H.K.) International Limited

Petitioner / Company (acting by Provisional Liquidators)

Provisional Liquidators

Provisional Liquidators for the Company

Jinro Limited (Jinro Korea)

Parent Company / Guarantor / Related Party

Jinro Japan Inc.

Subsidiary / Asset in Dispute

Scheme Creditors

Class of Creditors (holders of Notes and Pusan Debt Guaranteed by Jinro Korea)

Single Recourse Creditors

Other Unsecured Creditors With Recourse Only to the Company

Procedural Posture

Scheme of Arrangement Under Companies Ordinance (cap. 32) / Sanction Hearing / Judgment (scheme Sanctioned)

Legal Issues

  1. 1 Whether statutory requirements for sanctioning a scheme under section 166 were satisfied (notice, information, class constitution, requisite majority)
  2. 2 Whether the Scheme Creditors constituted a proper single class
  3. 3 Whether Single Recourse Creditors should have been included or were detrimentally affected by the scheme

Ratio Decidendi

The court sanctioned the Scheme because the statutory requisites were satisfied: the meeting was properly convened and informed, the Scheme Creditors formed a proper single class by reason of their dual recourse, the requisite majority voted in favour, Single Recourse Creditors were not detrimentally affected and the Scheme represented a commercially rational compromise that an intelligent and honest member of the class would reasonably approve.

Court Disposition

Scheme sanctioned as modified

Orders

  • Scheme sanctioned as modified in the draft submitted to the court
  • Approved modification that Stonehill Institutional Partners claims be treated as Scheme Liabilities but that Stonehill shall not receive distributions until their claims are registered and accepted under the Korean Restructuring Plan