RE K.C.K. GARMENT FACTORY LTD

RE K.C.K. GARMENT FACTORY LTD

The court granted the orders appointing the provisional liquidators as liquidators because the appointment of the Ernst & Young trustees would create at least a perceived conflict of interest given competing duties as trustees in bankruptcy and potential rival claims between the companies and the bankruptcy estate,...

Source-derived case information.

Citation
[2019] HKCFI 1062
Parties
Company (subject): Easy Carry Limited; Company (subject): Kokin Limited (高建企業有限公司); Company (subject): Long Profit International Limited (利長國際有限公司); Company (subject): K.C.K. Garment Factory Limited (立基製衣廠有限公司); Company (subject): AP Procurement Macao Commercial Offshore Limited (AP Procurement澳門離岸商業服務有限公司); Applicant: Joint and several provisional liquidators; Respondent (trustees): Stephen Liu Yiukeung and Yen Chingwai David, Joint and Several Trustees of Mr Woo Koo-ping (Bankrupt) c/o Ernst & Young Transaction Limited; Interested Party (not Represented): Diamond Force Limited; Interested Party (not Represented): Oriented Prosperity Co Limited; Interested Party (official Receiver): Official Receiver
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
27 March 2019
Case Number
HCCW300/2014
Procedural Posture
Companies (winding Up) Proceedings Under Cap 32 / Application for Appointment of Liquidators (decision on Summons)
Outcome
Order granted in terms of the summonses; provisional liquidators appointed as liquidators
Legal Topics
Appointment of Liquidators, Conflict of Interest, Voting at Contributories and Creditors Meetings
Source Language
en
Company Law Insolvency Law Civil Procedure Appointment of Liquidators Conflict of Interest Voting at Contributories and Creditors Meetings

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Parties

Easy Carry Limited

Company (subject)

Kokin Limited (高建企業有限公司)

Company (subject)

Long Profit International Limited (利長國際有限公司)

Company (subject)

K.C.K. Garment Factory Limited (立基製衣廠有限公司)

Company (subject)

AP Procurement Macao Commercial Offshore Limited (AP Procurement澳門離岸商業服務有限公司)

Company (subject)

Joint and several provisional liquidators

Applicant

Stephen Liu Yiukeung and Yen Chingwai David, Joint and Several Trustees of Mr Woo Koo-ping (Bankrupt) c/o Ernst & Young Transaction Limited

Respondent (trustees)

Diamond Force Limited

Interested Party (not Represented)

Oriented Prosperity Co Limited

Interested Party (not Represented)

Official Receiver

Interested Party (official Receiver)

Procedural Posture

Companies (winding Up) Proceedings Under Cap 32 / Application for Appointment of Liquidators (decision on Summons)

Legal Issues

  1. 1 Validity of votes cast at contributories and creditors meetings
  2. 2 Whether persons who are trustees in bankruptcy may be appointed liquidators of related companies due to potential conflict of interest
  3. 3 Whether provisional liquidators should be appointed as liquidators given length of appointment and cost-effectiveness

Ratio Decidendi

The court granted the orders appointing the provisional liquidators as liquidators because the appointment of the Ernst & Young trustees would create at least a perceived conflict of interest given competing duties as trustees in bankruptcy and potential rival claims between the companies and the bankruptcy estate, and because there was no opposition and it was cost-effective and in the best interests of the winding up for the provisional liquidators to continue.

Court Disposition

Order granted in terms of the summonses; provisional liquidators appointed as liquidators

Orders

  • Order in the summonses granted
  • Appointment of the joint and several provisional liquidators as liquidators of the five companies