RE FAR EAST HOLTELS AND ENTERTAINMENT LTD

RE FAR EAST HOLTELS AND ENTERTAINMENT LTD

The court confirmed the proposed capital reduction because the company demonstrated discernible and legitimate purposes, complied with statutory and procedural requirements, and provided undertakings and a special capital reserve that adequately safeguarded creditors; consequently the reduction and application of the arising credit to write off specified losses and create the special reserve were authorised.

Citation
RE FAR EAST HOLTELS AND ENTERTAINMENT LTD
Parties
Petitioner: Far East Hotels and Entertainment Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
27 July 2007
Case Number
HCMP1124/2007
Procedural Posture
Capital Reduction Petition (companies Ordinance S59) / Judgment Confirming Capital Reduction
Outcome
Order made confirming the reduction of the Company's share capital in terms of the draft submitted to the court
Legal Topics
Capital Reduction, Share Premium Account, Creditors' Protection, Special Capital Reserve, Share Option Scheme
Source Language
EN
Company Law Corporate Finance Securities Regulation Capital Reduction Share Premium Account Creditors' Protection Special Capital Reserve Share Option Scheme

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Parties

Far East Hotels and Entertainment Limited

Petitioner

Procedural Posture

Capital Reduction Petition (companies Ordinance S59) / Judgment Confirming Capital Reduction

Legal Issues

  1. 1 Whether the reduction of share capital under section 59 of the Companies Ordinance should be confirmed
  2. 2 Whether creditors are adequately protected by the undertakings and the proposed special capital reserve
  3. 3 Whether the application of the credit arising on reduction to write off accumulated losses and to create a special reserve is permissible

Ratio Decidendi

The court confirmed the proposed capital reduction because the company demonstrated discernible and legitimate purposes, complied with statutory and procedural requirements, and provided undertakings and a special capital reserve that adequately safeguarded creditors; consequently the reduction and application of the arising credit to write off specified losses and create the special reserve were authorised.

Court Disposition

Order made confirming the reduction of the Company's share capital in terms of the draft submitted to the court

Orders

  • Confirmed reduction of paid-up capital by HK$0.90 per ordinary share, reducing nominal value from HK$1.00 to HK$0.10
  • Capital reduced by HK$439,958,407.50 on implementation of the reduction