RE CHINA CITY CONSTRUCTION (INTERNATIONAL) CO LTD

RE CHINA CITY CONSTRUCTION (INTERNATIONAL) CO LTD

The petitioner failed to demonstrate special circumstances sufficient to displace the majority preference for a creditors' voluntary liquidation; concerns about KPMG's independence and the need for investigation of transactions did not justify conversion because such investigations can properly be conducted within the CVL and there was no evidence of likely partiality; accordingly the petition was stayed with liberty to apply and costs ordered nisi to be paid from company assets.

Citation
[2019] HKCFI 1617
Parties
Petitioner/supporting Creditor: Amuse Peace Limited; Company/respondent: China City Construction (International) Co., Limited; Opposing Creditor/parent Shareholder: China City Construction Holding Group Company (CCCH); Opposing Creditor: China City Construction & Development Co (HK) Limited; Supporting Creditor: Champ Prestige International Limited; Supporting Creditor: BNP Paribas
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
10 May 2019
Case Number
HCCW166/2018
Procedural Posture
Companies Winding Up Proceedings (petition to Convert CVL to Compulsory) / Hearing/decision (petition Stayed With Liberty to Apply)
Outcome
Petition stayed with liberty to apply; costs ordered nisi to be paid out of the assets of the company, certificate for two counsel for Amuse Peace, costs to be taxed if not agreed
Legal Topics
Creditor Petition, Compulsory Liquidation, Creditors' Voluntary Liquidation, Liquidator Independence, Committee of Inspection, Claw Back Period, Official Receiver Supervision, Costs
Source Language
EN
Company Law Insolvency Corporate Insolvency Civil Procedure Creditor Petition Compulsory Liquidation Creditors' Voluntary Liquidation Liquidator Independence +4 more

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Parties

Amuse Peace Limited

Petitioner/supporting Creditor

China City Construction (International) Co., Limited

Company/respondent

China City Construction Holding Group Company (CCCH)

Opposing Creditor/parent Shareholder

China City Construction & Development Co (HK) Limited

Opposing Creditor

Champ Prestige International Limited

Supporting Creditor

BNP Paribas

Supporting Creditor

Procedural Posture

Companies Winding Up Proceedings (petition to Convert CVL to Compulsory) / Hearing/decision (petition Stayed With Liberty to Apply)

Legal Issues

  1. 1 Whether a creditors' voluntary liquidation should be converted into a compulsory winding up on petition by a creditor
  2. 2 Whether the liquidators (KPMG partners) lack independence sufficient to displace the normal entitlement of a creditor to a compulsory winding up
  3. 3 Whether the Companies Court should intervene where the majority in value of creditors prefer a CVL but the majority creditor is related to the company

Ratio Decidendi

The petitioner failed to demonstrate special circumstances sufficient to displace the majority preference for a creditors' voluntary liquidation; concerns about KPMG's independence and the need for investigation of transactions did not justify conversion because such investigations can properly be conducted within the CVL and there was no evidence of likely partiality; accordingly the petition was stayed with liberty to apply and costs ordered nisi to be paid from company assets.

Court Disposition

Petition stayed with liberty to apply; costs ordered nisi to be paid out of the assets of the company, certificate for two counsel for Amuse Peace, costs to be taxed if not agreed

Orders

  • Petition stayed with liberty to apply
  • Costs nisi: costs of the parties to be paid out of the assets of the Company; certificate for two counsel for Amuse Peace; costs to be taxed if not agreed