RE LEHMAN BROTHERS SECURITIES ASIA LTD (In Liquidation)

RE LEHMAN BROTHERS SECURITIES ASIA LTD (In Liquidation)

The Court sanctioned the three Schemes because the statutory procedures were complied with, explanatory statements were sufficient to inform creditors, the single-class composition was justified by creditors' common interest in avoiding litigation and achieving an expedient distribution, and the statutory majorities required by the Companies Ordinance voted in favour; accordingly the Schemes are ones that an intelligent and honest member might reasonably approve.

Citation
RE LEHMAN BROTHERS SECURITIES ASIA LTD (In Liquidation)
Parties
Scheme Company (in Liquidation): Lehman Brothers Asia Limited; Scheme Company (in Liquidation): Lehman Brothers Futures Asia Limited; Scheme Company (in Liquidation): Lehman Brothers Securities Asia Limited; Interested Party/ultimate Holding Company: Lehman Brothers Holdings Inc
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
14 February 2017
Case Number
HCMP2266/2016
Procedural Posture
Sanction of Schemes of Arrangement Under Part 13 Division 2 of the Companies Ordinance (cap 622) / Sanction Hearing and Reasons for Decision
Outcome
The Court sanctioned each of the three Schemes of arrangement.
Legal Topics
Scheme of Arrangement, Post Liquidation Interest (pli), Provable and Non Provable Claims, Priority and Order of Distribution, Constitution of Classes for Scheme Meetings
Source Language
EN
Company Law Insolvency Law Civil Procedure Scheme of Arrangement Post Liquidation Interest (pli) Provable and Non Provable Claims Priority and Order of Distribution Constitution of Classes for Scheme Meetings

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Parties

Lehman Brothers Asia Limited

Scheme Company (in Liquidation)

Lehman Brothers Futures Asia Limited

Scheme Company (in Liquidation)

Lehman Brothers Securities Asia Limited

Scheme Company (in Liquidation)

Lehman Brothers Holdings Inc

Interested Party/ultimate Holding Company

Procedural Posture

Sanction of Schemes of Arrangement Under Part 13 Division 2 of the Companies Ordinance (cap 622) / Sanction Hearing and Reasons for Decision

Legal Issues

  1. 1 Whether PLI should be treated interest-first or principal-first and the accrual date for PLI
  2. 2 Whether PLI is payable on contingent or non-provable claims
  3. 3 Whether non-provable claims (notably currency conversion claims) are enforceable under Hong Kong law

Ratio Decidendi

The Court sanctioned the three Schemes because the statutory procedures were complied with, explanatory statements were sufficient to inform creditors, the single-class composition was justified by creditors' common interest in avoiding litigation and achieving an expedient distribution, and the statutory majorities required by the Companies Ordinance voted in favour; accordingly the Schemes are ones that an intelligent and honest member might reasonably approve.

Court Disposition

The Court sanctioned each of the three Schemes of arrangement.

Orders

  • Sanctioned the schemes of arrangement for Lehman Brothers Asia Limited, Lehman Brothers Futures Asia Limited and Lehman Brothers Securities Asia Limited pursuant to Part 13 Division 2 of the Companies Ordinance (Cap 622).
  • Declared that the statutory requirements for convening meetings, provision of explanatory statements and obtaining requisite majorities had been satisfied.