RE VALUE FOOD SUPPLY LTD (“COMPANY”)

RE VALUE FOOD SUPPLY LTD (“COMPANY”)

Applying s194(1)(c) the court must exercise its discretion having regard to the interests of creditors overall; because the supporting creditors were associated with the company less weight was given to their votes and greater weight to independent creditors; the court therefore appointed the nominees from Briscoe Wong as liquidators, established a Committee of Inspection with cross-representation, and ordered costs allocation including splitting certain JPLs costs 50/50 between the company and Win-Chain.

Citation
[2021] HKCFI 2975
Parties
Company (subject): Value Food Supply Limited; Petitioner/creditor: Shanghai Win-Chain Supply Chain Management Co., Ltd; Petitioner/creditor: Win-Chain (Hongkong) Co., Ltd; Joint and Several Provisional Liquidators (jpls): Vision AS Limited (Tsui Mei Yuk Janice; Wong Sun Keung); Creditor (supporting Creditor): Ocean Incorporation Ltd; Creditor (supporting Creditor): PAE Limited; Creditor (supporting Creditor): Pacific Andes International Holdings (BVI) Limited; Creditor (supporting Creditor): Meridian Investment Group Pte Ltd; Nominated Insolvency Practitioners (interested Party): Borrelli Walsh Limited; Proposed Liquidators (proposed by Win Chain): Briscoe Wong Advisory Ltd; Alternate Proposed Liquidators: Grant Thornton Recovery & Reorganisation Limited; Official Receiver: Official Receiver
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
29 September 2021
Case Number
HCCW149/2020
Procedural Posture
Companies Winding Up Proceedings (appointment of Liquidators) / Chambers Hearing on Summons to Confirm Appointment of Liquidators and Related Reliefs
Outcome
Court appointed the nominees from Briscoe Wong Advisory Ltd as liquidators; established a Committee of Inspection; refused to disqualify supporting creditors' proofs as a basis to appoint the JPLs; made specific costs orders.
Legal Topics
Appointment of Liquidators, Creditor Voting and Weighting, Conflict of Interest of Insolvency Practitioners, Committee of Inspection, Costs in Liquidation Proceedings
Source Language
EN
Company Law Insolvency Law Civil Procedure Appointment of Liquidators Creditor Voting and Weighting Conflict of Interest of Insolvency Practitioners Committee of Inspection Costs in Liquidation Proceedings

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Parties

Value Food Supply Limited

Company (subject)

Shanghai Win-Chain Supply Chain Management Co., Ltd

Petitioner/creditor

Win-Chain (Hongkong) Co., Ltd

Petitioner/creditor

Vision AS Limited (Tsui Mei Yuk Janice; Wong Sun Keung)

Joint and Several Provisional Liquidators (jpls)

Ocean Incorporation Ltd

Creditor (supporting Creditor)

PAE Limited

Creditor (supporting Creditor)

Pacific Andes International Holdings (BVI) Limited

Creditor (supporting Creditor)

Meridian Investment Group Pte Ltd

Creditor (supporting Creditor)

Borrelli Walsh Limited

Nominated Insolvency Practitioners (interested Party)

Briscoe Wong Advisory Ltd

Proposed Liquidators (proposed by Win Chain)

Grant Thornton Recovery & Reorganisation Limited

Alternate Proposed Liquidators

Official Receiver

Official Receiver

Procedural Posture

Companies Winding Up Proceedings (appointment of Liquidators) / Chambers Hearing on Summons to Confirm Appointment of Liquidators and Related Reliefs

Legal Issues

  1. 1 Whether supporting creditors associated with the company were entitled to vote and the weight to be given to their votes
  2. 2 Whether the provisional/private joint liquidators (JPLs) appointed by the Official Receiver should be confirmed by the court
  3. 3 Whether there was a material conflict of interest affecting Borrelli Walsh such that their nomination was disqualified

Ratio Decidendi

Applying s194(1)(c) the court must exercise its discretion having regard to the interests of creditors overall; because the supporting creditors were associated with the company less weight was given to their votes and greater weight to independent creditors; the court therefore appointed the nominees from Briscoe Wong as liquidators, established a Committee of Inspection with cross-representation, and ordered costs allocation including splitting certain JPLs costs 50/50 between the company and Win-Chain.

Court Disposition

Court appointed the nominees from Briscoe Wong Advisory Ltd as liquidators; established a Committee of Inspection; refused to disqualify supporting creditors' proofs as a basis to appoint the JPLs; made specific costs orders.

Orders

  • Appoint nominees from Briscoe Wong Advisory Ltd as liquidators of the Company
  • Appoint a Committee of Inspection consisting of Win-Chain, 山東同興有限公司 and Pacific Andes