RE ZHU KUAN (HONG KONG) CO LTD

Parties

Procedural Posture

Companies (winding Up) / Schemes of Arrangement / Application for Sanction of Schemes Under S166 Companies Ordinance and for Permanent Stay of Winding Up Under S209; Reasons for Judgment Delivered

Legal Issues

1. 1 Whether the schemes of arrangement should be sanctioned under section 166 of the Companies Ordinance
2. 2 Whether to grant a permanent stay of the winding-up proceedings under section 209 of the Companies Ordinance conditional on the schemes becoming effective
3. 3 Whether the class of creditors was properly constituted and the scheme meetings properly convened

Ratio Decidendi

The court sanctioned the inter-conditional schemes and granted a permanent stay of the winding-up proceedings conditional on the schemes becoming effective because the schemes were properly constituted and approved by the requisite majorities, fully disclosed to the court, likely to produce a better and more certain recovery for creditors than continued cross-border litigation, and not contrary to the public interest; the Official Receiver raised no objection and the liquidators had completed necessary investigations.

Court Disposition

Schemes of arrangement sanctioned for both companies; permanent stay of winding-up proceedings granted conditional on schemes becoming effective; liquidators to be released on the stay taking effect; costs to be paid by the companies in accordance with the schemes and petitioning creditor's costs to be paid by the...

Orders

• Schemes of arrangement for Zhu Kuan (Hong Kong) Company Limited and Zhu Kuan Group Company Limited sanctioned by the court in terms of the draft orders submitted
• Permanent stay of all further proceedings in the winding-up of each company granted conditional upon the schemes becoming effective to the satisfaction of the liquidators as scheme administrators