RE UDL HOLDINGS LTD AND OTHERS

RE UDL HOLDINGS LTD AND OTHERS

Court sanctioned the proposed modifications to the schemes for the Company and 23 of its subsidiaries but declined to sanction Dockyard's scheme modifications without the liquidators' consent; the Disputed Assets (certain Unencumbered Assets and Accounts Receivable of Dockyard not vested in Newco or realised at the commencement of liquidation) were held to constitute assets of Dockyard available to the liquidation because no trust had been constituted in respect of them by virtue of the Scheme absent actual vesting/receipt; consent of the liquidator is required to vary a scheme affecting a company in liquidation.

Citation
RE UDL HOLDINGS LTD AND OTHERS
Parties
Scheme Companies: UDL Holdings Limited and 24 Scheme Participating Subsidiaries; Scheme Administrator: Matthew Finbarr O'Driscoll; Scheme Participating Subsidiary: Universal Dockyard Limited; Liquidator: Liquidators of Universal Dockyard Limited (Simon Richard Blade and Bruno Arboit); Opposing Creditor: Fonfair Company Limited; Opposing Creditor: Showa Leasing (Hong Kong) Limited; Major Shareholder/prospective Purchaser: Harbour Front Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
7 June 2006
Case Number
HCMP417/2000
Procedural Posture
Companies (scheme of Arrangement) and Winding Up Proceedings / Judgment on Petition to Sanction Modifications and Directions Summons by Liquidators
Outcome
Modifications sanctioned for the Company and 23 Scheme Participating Subsidiaries; Dockyard modifications adjourned; direction that Dockyard disputed assets are assets of Dockyard in liquidation and not to be dealt with under the Schemes
Legal Topics
Scheme of Arrangement, Modification of Scheme, Winding Up, Trust Over Assets, Creditor Voting and Disclosure, Costs
Source Language
EN
Company Law Insolvency Law Trusts Law Civil Procedure Scheme of Arrangement Modification of Scheme Winding Up Trust Over Assets +2 more

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Parties

UDL Holdings Limited and 24 Scheme Participating Subsidiaries

Scheme Companies

Matthew Finbarr O'Driscoll

Scheme Administrator

Universal Dockyard Limited

Scheme Participating Subsidiary

Liquidators of Universal Dockyard Limited (Simon Richard Blade and Bruno Arboit)

Liquidator

Fonfair Company Limited

Opposing Creditor

Showa Leasing (Hong Kong) Limited

Opposing Creditor

Harbour Front Limited

Major Shareholder/prospective Purchaser

Procedural Posture

Companies (scheme of Arrangement) and Winding Up Proceedings / Judgment on Petition to Sanction Modifications and Directions Summons by Liquidators

Legal Issues

  1. 1 Whether the proposed modifications to the schemes of arrangement should be sanctioned by the court
  2. 2 Whether the Unencumbered Assets and Accounts Receivable of Universal Dockyard Limited (Dockyard) form part of the assets available in Dockyard's liquidation or are held on trust for scheme creditors
  3. 3 Whether the consent of Dockyard (via its liquidators) is required to sanction modifications to Dockyard's scheme while Dockyard is in liquidation

Ratio Decidendi

Court sanctioned the proposed modifications to the schemes for the Company and 23 of its subsidiaries but declined to sanction Dockyard's scheme modifications without the liquidators' consent; the Disputed Assets (certain Unencumbered Assets and Accounts Receivable of Dockyard not vested in Newco or realised at the commencement of liquidation) were held to constitute assets of Dockyard available to the liquidation because no trust had been constituted in respect of them by virtue of the Scheme absent actual vesting/receipt; consent of the liquidator is required to vary a scheme affecting a company in liquidation.

Court Disposition

Modifications sanctioned for the Company and 23 Scheme Participating Subsidiaries; Dockyard modifications adjourned; direction that Dockyard disputed assets are assets of Dockyard in liquidation and not to be dealt with under the Schemes

Orders

  • Modifications to the Schemes sanctioned in respect of UDL Holdings Limited and 23 Scheme Participating Subsidiaries
  • Petition relating to the Modifications to Universal Dockyard Limited adjourned to a date to be fixed, not earlier than 28 days from judgment, for the liquidators to ascertain creditors' wishes