RE MUSIC TRADING ON-LINE (HK) LTD

RE MUSIC TRADING ON-LINE (HK) LTD

The court sanctioned the scheme because the class of creditors was properly constituted, creditors were given sufficient information, preferential claims were protected, the proposed treatment of the secured creditor was acceptable, and the scheme produced a better and more certain return to creditors than liquidation; accordingly an intelligent and honest member of the class might reasonably approve the arrangement.

Citation
RE MUSIC TRADING ON-LINE (HK) LTD
Parties
Petitioner / Company (receivers Appointed): Music Trading On-line (HK) Limited (Receivers Appointed); Petitioning Creditors / Plaintiffs in UK Proceedings: Independiente Limited; EMI Records Limited; XL Recordings Limited; Wildstar Records Limited; Mercury Records Limited; Sony Music Entertainment (UK) Limited; Sony Music Entertainment Inc.; Secured Creditor (relinquished Security Under Scheme): Asia Sino Holdings Limited; Purchaser of Company Assets: Stomp Pty Limited; Preferential Creditor (tax Claim): Commissioner for Inland Revenue
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
11 December 2008
Case Number
HCMP1541/2008
Procedural Posture
Scheme of Arrangement Under Section 166 Companies Ordinance / Sanction Hearing and Judgment (scheme Approved and Sanctioned)
Outcome
Scheme of arrangement sanctioned by the court under section 166; order made in terms of the draft as amended
Legal Topics
Scheme of Arrangement, Winding Up Petition, Receivership, Mareva Injunction, Enforcement of Foreign Judgment, Preferential Claims and Distribution
Source Language
EN
Company Law Insolvency Civil Procedure Commercial Law Scheme of Arrangement Winding Up Petition Receivership Mareva Injunction +2 more

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Parties

Music Trading On-line (HK) Limited (Receivers Appointed)

Petitioner / Company (receivers Appointed)

Independiente Limited; EMI Records Limited; XL Recordings Limited; Wildstar Records Limited; Mercury Records Limited; Sony Music Entertainment (UK) Limited; Sony Music Entertainment Inc.

Petitioning Creditors / Plaintiffs in UK Proceedings

Asia Sino Holdings Limited

Secured Creditor (relinquished Security Under Scheme)

Stomp Pty Limited

Purchaser of Company Assets

Commissioner for Inland Revenue

Preferential Creditor (tax Claim)

Procedural Posture

Scheme of Arrangement Under Section 166 Companies Ordinance / Sanction Hearing and Judgment (scheme Approved and Sanctioned)

Legal Issues

  1. 1 Whether the proposed scheme of arrangement should be sanctioned under section 166
  2. 2 Whether the class of creditors was properly constituted
  3. 3 Whether preferential claims (tax) would be adequately protected

Ratio Decidendi

The court sanctioned the scheme because the class of creditors was properly constituted, creditors were given sufficient information, preferential claims were protected, the proposed treatment of the secured creditor was acceptable, and the scheme produced a better and more certain return to creditors than liquidation; accordingly an intelligent and honest member of the class might reasonably approve the arrangement.

Court Disposition

Scheme of arrangement sanctioned by the court under section 166; order made in terms of the draft as amended

Orders

  • Scheme of arrangement sanctioned under section 166 of the Companies Ordinance (Cap.32)
  • Order made in terms of the draft scheme as amended