RE GREATER BEIJING FIRST EXPRESSWAYS LTD

RE GREATER BEIJING FIRST EXPRESSWAYS LTD

The court held that the liquidators' outright refusal to sell assignable causes of action was a decision a reasonable liquidator could not make where a purchaser offered consideration and appropriate safeguards; accordingly the liquidators were directed to assign the assignable causes of action to GBRE unless a higher offer was received within 14 days, conditional on GBRE paying US$250,000 into court as security for liquidators' costs and on a BVI court order declaring the dissolution void.

Citation
RE GREATER BEIJING FIRST EXPRESSWAYS LTD
Parties
Applicant (assignment Summons), Sole Shareholder and Subordinated Creditor: Greater Beijing Region Expressways Ltd (GBRE); Company in Liquidation: Greater Beijing First Expressways Limited (GBFE) (In Liquidation); Respondent (liquidators): Joint & Several Liquidators of GBFE; Indenture Trustee / Interested Creditor: JP Morgan Chase Bank (indenture trustee for the Noteholders)
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
14 March 2006
Case Number
HCCW338/2000
Procedural Posture
Companies (winding Up) No. 338 of 2000 / Interlocutory Hearing on Assignment and Release Summonses (decision on Summonses)
Outcome
Assignment Summons granted in part; Release Summons adjourned sine die with liberty to restore
Legal Topics
Liquidator Powers and Review Under Section 200(5), Assignment of Causes of Action, Security for Costs, Duty to Obtain Best Price/marketing of Assets, Effect of Foreign Dissolution
Source Language
EN
Company Law Insolvency Civil Procedure Cross Border Insolvency Liquidator Powers and Review Under Section 200(5) Assignment of Causes of Action Security for Costs Duty to Obtain Best Price/marketing of Assets +1 more

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Parties

Greater Beijing Region Expressways Ltd (GBRE)

Applicant (assignment Summons), Sole Shareholder and Subordinated Creditor

Greater Beijing First Expressways Limited (GBFE) (In Liquidation)

Company in Liquidation

Joint & Several Liquidators of GBFE

Respondent (liquidators)

JP Morgan Chase Bank (indenture trustee for the Noteholders)

Indenture Trustee / Interested Creditor

Procedural Posture

Companies (winding Up) No. 338 of 2000 / Interlocutory Hearing on Assignment and Release Summonses (decision on Summonses)

Legal Issues

  1. 1 Whether GBRE had locus to apply under ss.199(3) and 200(5)
  2. 2 Whether the liquidators' refusal to assign causes of action was one no reasonable liquidator could have made
  3. 3 Which causes of action are assignable given prior sale agreements

Ratio Decidendi

The court held that the liquidators' outright refusal to sell assignable causes of action was a decision a reasonable liquidator could not make where a purchaser offered consideration and appropriate safeguards; accordingly the liquidators were directed to assign the assignable causes of action to GBRE unless a higher offer was received within 14 days, conditional on GBRE paying US$250,000 into court as security for liquidators' costs and on a BVI court order declaring the dissolution void.

Court Disposition

Assignment Summons granted in part; Release Summons adjourned sine die with liberty to restore

Orders

  • Unless a higher offer is received within 14 days and upon GBRE paying into court US$250,000.00 within 7 days as security for the liquidators' costs, the liquidators are directed to assign to GBRE the various assignable causes of action in the revised schedule on the principal terms in the Letter dated 22 November 2005
  • The liquidators' obligation to assign is conditional on an order of the BVI court declaring the dissolution of GBFE to be void