LIN LESTER CHI KEE v. CHAN LEUK FU AND ANOTHER

LIN LESTER CHI KEE v. CHAN LEUK FU AND ANOTHER

Application for a stay of winding up was dismissed because the court was not satisfied the Company could meet all its debts and liquidation costs even if the settlement were effective; additionally the proposed security to implement the settlement would constitute prohibited financial assistance under s47A and the Company could not realistically comply with the statutory exceptions (s47C or s47E), making implementation unworkable while in liquidation and defeating the basis for a stay.

Citation
LIN LESTER CHI KEE v. CHAN LEUK FU AND ANOTHER
Parties
Petitioner: LIN LESTER CHI KEE; 1st Respondent: CHAN LEUK FU; 2nd Respondent: NU-WEST NATURAL PRODUCTS CORP. LIMITED
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
2 July 2010
Case Number
HCCW293/2006
Procedural Posture
Company Winding Up Stay Application / Application in Chambers After Winding Up Order
Outcome
Application dismissed
Legal Topics
Winding Up, Stay of Proceedings, Financial Assistance to Purchase Own Shares, Directors' Statutory Declaration, Solvency Assessment, Enforceability of Settlement Agreements in Liquidation
Source Language
EN
Company Law Insolvency Civil Procedure Winding Up Stay of Proceedings Financial Assistance to Purchase Own Shares Directors' Statutory Declaration Solvency Assessment +1 more

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Parties

LIN LESTER CHI KEE

Petitioner

CHAN LEUK FU

1st Respondent

NU-WEST NATURAL PRODUCTS CORP. LIMITED

2nd Respondent

Procedural Posture

Company Winding Up Stay Application / Application in Chambers After Winding Up Order

Legal Issues

  1. 1 Whether a stay of the winding up should be granted under section 209(1) Companies Ordinance
  2. 2 Whether the Company is solvent such that a stay is appropriate
  3. 3 Whether the US settlement agreement is binding on the Company and capable of implementation while the Company is in liquidation

Ratio Decidendi

Application for a stay of winding up was dismissed because the court was not satisfied the Company could meet all its debts and liquidation costs even if the settlement were effective; additionally the proposed security to implement the settlement would constitute prohibited financial assistance under s47A and the Company could not realistically comply with the statutory exceptions (s47C or s47E), making implementation unworkable while in liquidation and defeating the basis for a stay.

Court Disposition

Application dismissed

Orders

  • Application dismissed
  • Order nisi that Mr Lin's and the Liquidators' costs of the application be paid by Mr Chan, to be taxed on the party and party basis if not agreed