RE LUEN YICK WATER & DRAINAGE WORKS LTD.

RE LUEN YICK WATER & DRAINAGE WORKS LTD.

Given the company is insolvent and there was a clear majority in value of admitted proofs in favour of Messrs Borrelli and Kennedy, and no evidence of unfitness or conflict, the court appointed Borrelli and Kennedy as joint and several liquidators; the court exercised its discretion to appoint a five‑member committee of inspection representative of creditor interests and ordered ancillary measures including security, remuneration mechanism, advertising and treatment of costs as liquidation expenses.

Citation
RE LUEN YICK WATER & DRAINAGE WORKS LTD.
Parties
Company (debtor): Luen Yick Water & Drainage Works Ltd; Provisional Liquidator / Applicant to Court: Official Receiver; Contributory and Creditor (applicant): Lee Cheung Ching; Contributory and Creditor (applicant): Wong Sik Fai; Contributory and Creditor (applicant): Cheng Lai Hing; Creditor: Hyundai Engineering and Construction Company Ltd; Creditor: Bun Kee (International) Ltd; Creditor: The Bank of East Asia Ltd; Creditor: Chekiang First Bank Ltd; Proposed Liquidator (appointed): Cosimo Borrelli; Proposed Liquidator (appointed): David John Kennedy; Proposed Liquidator (proposed by Contributories): Fenn Kar Bik Lily; Proposed Liquidator (proposed by Contributories): Lee Ka Man
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
9 January 2003
Case Number
HCCW209/2002
Procedural Posture
Companies (winding Up) / Determination Hearing Under R45 Following First Meetings of Creditors and Contributories; Decision Delivered
Outcome
Court appointed Messrs Cosimo Borrelli and David John Kennedy as joint and several liquidators; appointed a five‑member committee of inspection; ordered ancillary procedural and costs directions.
Legal Topics
Appointment of Liquidators, Committee of Inspection, Proofs of Debt and Voting, Court Discretion in Winding Up, Costs and Remuneration, Security by Liquidators
Source Language
EN
Company Law Insolvency Law Corporate Insolvency Procedure Appointment of Liquidators Committee of Inspection Proofs of Debt and Voting Court Discretion in Winding Up Costs and Remuneration +1 more

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Parties

Luen Yick Water & Drainage Works Ltd

Company (debtor)

Official Receiver

Provisional Liquidator / Applicant to Court

Lee Cheung Ching

Contributory and Creditor (applicant)

Wong Sik Fai

Contributory and Creditor (applicant)

Cheng Lai Hing

Contributory and Creditor (applicant)

Hyundai Engineering and Construction Company Ltd

Creditor

Bun Kee (International) Ltd

Creditor

The Bank of East Asia Ltd

Creditor

Chekiang First Bank Ltd

Creditor

Cosimo Borrelli

Proposed Liquidator (appointed)

David John Kennedy

Proposed Liquidator (appointed)

Fenn Kar Bik Lily

Proposed Liquidator (proposed by Contributories)

Lee Ka Man

Proposed Liquidator (proposed by Contributories)

Procedural Posture

Companies (winding Up) / Determination Hearing Under R45 Following First Meetings of Creditors and Contributories; Decision Delivered

Legal Issues

  1. 1 Whether creditors' majority decision should determine appointment of liquidators where company insolvent
  2. 2 Admissibility of proofs of debt for voting where underlying claims unliquidated or subject to litigation
  3. 3 Whether a committee of inspection should be appointed and its composition

Ratio Decidendi

Given the company is insolvent and there was a clear majority in value of admitted proofs in favour of Messrs Borrelli and Kennedy, and no evidence of unfitness or conflict, the court appointed Borrelli and Kennedy as joint and several liquidators; the court exercised its discretion to appoint a five‑member committee of inspection representative of creditor interests and ordered ancillary measures including security, remuneration mechanism, advertising and treatment of costs as liquidation expenses.

Court Disposition

Court appointed Messrs Cosimo Borrelli and David John Kennedy as joint and several liquidators; appointed a five‑member committee of inspection; ordered ancillary procedural and costs directions.

Orders

  • Messrs Cosimo Borrelli and David John Kennedy be appointed joint and several liquidators of the Company
  • A committee of inspection be appointed with five members: a representative of Hyundai, a representative of The Bank of East Asia Ltd, Lee Cheung Ching, Lam Ho Lin, and Lin Lam Yim as representative of Cheung Kwong Engineering Company