RE FOUNDER INFORMATION (HONG KONG) LTD

RE FOUNDER INFORMATION (HONG KONG) LTD

The court directed that, on the evidence before it, the liquidators' proposed sale by private tender of the Company's 3,850,134,407 shares in PKU Resources would be a proper exercise of their powers under section 199(3) and falls within the range of decisions a reasonable liquidator could properly take; accordingly the court gave a direction under section 200(3) and ordered costs to be paid from the Company's assets.

Citation
[2021] HKCFI 1749
Parties
Company (in Liquidation): Founder Information (Hong Kong) Limited; Applicant: Joint and several liquidators; Creditor/trustee for Bondholders: The Bank of New York Mellon; Ultimate Parent (in Mainland Reorganisation): Peking University Founder Group Company Limited (PUFG); Asset / Investment Holding Company (60% Owned): Peking University Resources (Holdings) Company Limited (PKU Resources); Interested Objectors: Onshore Investors Consortium (Zhuhai Huafa, Ping An, Shenzhen SDG)
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
8 June 2021
Case Number
HCCW350/2020
Procedural Posture
Companies Winding Up Proceedings / Liquidation; Application for Directions Under Section 200(3) of Cap 32
Outcome
Direction granted: court confirmed the proposed sale is within the range of reasonable decisions and would be a proper exercise of the liquidators' powers under section 199(3); costs to be paid out of the Company's assets.
Legal Topics
Liquidator Powers, Sale of Company Assets, Court Directions to Liquidators, Creditor Objections, Valuation and Tender Process
Source Language
EN
Company Law Insolvency Law Civil Procedure Cross Border Insolvency Liquidator Powers Sale of Company Assets Court Directions to Liquidators Creditor Objections +1 more

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Parties

Founder Information (Hong Kong) Limited

Company (in Liquidation)

Joint and several liquidators

Applicant

The Bank of New York Mellon

Creditor/trustee for Bondholders

Peking University Founder Group Company Limited (PUFG)

Ultimate Parent (in Mainland Reorganisation)

Peking University Resources (Holdings) Company Limited (PKU Resources)

Asset / Investment Holding Company (60% Owned)

Onshore Investors Consortium (Zhuhai Huafa, Ping An, Shenzhen SDG)

Interested Objectors

Procedural Posture

Companies Winding Up Proceedings / Liquidation; Application for Directions Under Section 200(3) of Cap 32

Legal Issues

  1. 1 Whether the court should give a direction under section 200(3) that the liquidators' proposed sale is within the range of reasonable decisions available to them
  2. 2 Whether the proposed sale constitutes an improper 'fire sale' warranting delay
  3. 3 Whether the court should intervene in a commercial decision of liquidators absent a reasonable attack on propriety

Ratio Decidendi

The court directed that, on the evidence before it, the liquidators' proposed sale by private tender of the Company's 3,850,134,407 shares in PKU Resources would be a proper exercise of their powers under section 199(3) and falls within the range of decisions a reasonable liquidator could properly take; accordingly the court gave a direction under section 200(3) and ordered costs to be paid from the Company's assets.

Court Disposition

Direction granted: court confirmed the proposed sale is within the range of reasonable decisions and would be a proper exercise of the liquidators' powers under section 199(3); costs to be paid out of the Company's assets.

Orders

  • It would be a proper exercise of the applicant’s powers of sale under section 199(3) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance, Cap 32 for the Company to sell in full or in part, by way of private tender, the 3,850,134,407 shares held by the Company in the capital of Peking University...
  • The costs of and incidental to this application be paid out of the assets of the Company.