RE LA MILKY WAY INTERNATIONAL CO LTD

RE LA MILKY WAY INTERNATIONAL CO LTD

The court sanctioned the Schemes because statutory requirements were satisfied, creditors (single class) were adequately informed and unanimously approved the Schemes, and evidence showed the proposed restructuring would produce materially better and quicker recoveries for creditors than liquidation; the court granted leave to the provisional liquidators to sell Hang Fung's remaining stock to the Investor because the Investor's offer represented the best obtainable outcome in the circumstances and exceeded estimated forced‑sale recoveries, notwithstanding the substantial apparent discount to book value.

Citation
RE LA MILKY WAY INTERNATIONAL CO LTD
Parties
Company Subject to Schemes and Under Provisional Liquidation: Gold Technology Limited (Holdings); Subsidiary Subject to Scheme and Winding Up Petition; Asset Seller: Hang Fung; Subsidiary Subject to Parallel Scheme: 3D-GOLD Company; Subsidiary Subject to Parallel Scheme: 3D-GOLD International; Subsidiary Subject to Parallel Scheme: La Milky Way; Subsidiary Excluded From Scheme But Featured in Pricing: 3-D GOLD Enterprise Development (Shenzhen) Company Limited; Excluded Subsidiary Continuing as Going Concern: Gold Ocean Jewellery Company Limited; Investor / Proposed Purchaser: China Gold Silver Group Company Limited; Petitioner (creditor) Who Presented Winding Up Petitions: The Hongkong and Shanghai Banking Corporation Limited; Applicants Seeking Sanction and Leave to Sell Assets: Provisional Liquidators of Holdings and Hang Fung; Judge of the Court of First Instance Delivering Reasons for Judgment: Hon Kwan J (S Kwan); Statutory Stakeholder; Attendance Excused: Official Receiver
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
9 July 2009
Case Number
HCMP1207/2009
Procedural Posture
Scheme of Arrangement Under Companies Ordinance (s166) and Related Applications for Leave to Sell Assets / Sanction Hearing and Judgment (reasons for Judgment Delivered)
Outcome
Schemes sanctioned and leave granted to provisional liquidators to sell Hang Fung's remaining stock to the Investor in accordance with the Schemes
Legal Topics
Scheme of Arrangement, Provisional Liquidation, Sale of Assets by Provisional Liquidators, Sanction of Schemes, Creditors' Meetings and Voting
Source Language
EN
Company Law Insolvency Law Commercial Restructuring Scheme of Arrangement Provisional Liquidation Sale of Assets by Provisional Liquidators Sanction of Schemes Creditors' Meetings and Voting

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Parties

Gold Technology Limited (Holdings)

Company Subject to Schemes and Under Provisional Liquidation

Hang Fung

Subsidiary Subject to Scheme and Winding Up Petition; Asset Seller

3D-GOLD Company

Subsidiary Subject to Parallel Scheme

3D-GOLD International

Subsidiary Subject to Parallel Scheme

La Milky Way

Subsidiary Subject to Parallel Scheme

3-D GOLD Enterprise Development (Shenzhen) Company Limited

Subsidiary Excluded From Scheme But Featured in Pricing

Gold Ocean Jewellery Company Limited

Excluded Subsidiary Continuing as Going Concern

China Gold Silver Group Company Limited

Investor / Proposed Purchaser

The Hongkong and Shanghai Banking Corporation Limited

Petitioner (creditor) Who Presented Winding Up Petitions

Provisional Liquidators of Holdings and Hang Fung

Applicants Seeking Sanction and Leave to Sell Assets

Hon Kwan J (S Kwan)

Judge of the Court of First Instance Delivering Reasons for Judgment

Official Receiver

Statutory Stakeholder; Attendance Excused

Procedural Posture

Scheme of Arrangement Under Companies Ordinance (s166) and Related Applications for Leave to Sell Assets / Sanction Hearing and Judgment (reasons for Judgment Delivered)

Legal Issues

  1. 1 Whether the schemes of arrangement under s166 Cap.32 should be sanctioned
  2. 2 Whether statutory requirements and proper creditor class and voting were satisfied
  3. 3 Whether the provisional liquidators should be granted leave to sell Hang Fung's remaining stock to the Investor despite a substantial discount compared with book value

Ratio Decidendi

The court sanctioned the Schemes because statutory requirements were satisfied, creditors (single class) were adequately informed and unanimously approved the Schemes, and evidence showed the proposed restructuring would produce materially better and quicker recoveries for creditors than liquidation; the court granted leave to the provisional liquidators to sell Hang Fung's remaining stock to the Investor because the Investor's offer represented the best obtainable outcome in the circumstances and exceeded estimated forced‑sale recoveries, notwithstanding the substantial apparent discount to book value.

Court Disposition

Schemes sanctioned and leave granted to provisional liquidators to sell Hang Fung's remaining stock to the Investor in accordance with the Schemes

Orders

  • Sanction of the schemes of arrangement under section 166 of the Companies Ordinance in respect of Holdings and the three Hong Kong subsidiaries (3D-GOLD Company, 3D-GOLD International and La Milky Way)
  • Grant leave to the provisional liquidators of Hang Fung to sell the remaining stock to China Gold Silver Group Company Limited on the terms and for the consideration provided in the Schemes (as set out in the summons)