RE FAI FIRST PACIFIC INSURANCE CO LTD

RE FAI FIRST PACIFIC INSURANCE CO LTD

Given the demonstrable cost savings, limited and rational six month period, absence of prejudice to creditors, ongoing consultation with a creditors' committee and the Commissioner of Insurance's lack of objection, the court exercised its discretion to extend the provisional liquidations for six months to permit preparation and presentation of a scheme of arrangement.

Citation
RE FAI FIRST PACIFIC INSURANCE CO LTD
Parties
Company (subject): HIH Insurance (Asia) Limited (Provisional Liquidators Appointed); Company (subject): HIH Holdings (Asia) Limited (Provisional Liquidators Appointed); Company (subject): FAI First Pacific Insurance Company Limited (Provisional Liquidators Appointed); Company (subject): HIH Casualty and General Insurance (Asia) Limited (Managers Appointed); Petitioner: Provisional Liquidators / Managers; Respondent: Official Receiver; Interested Party: Insurance Authority / Commissioner of Insurance
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
21 December 2001
Case Number
HCCW339/2001
Procedural Posture
Companies Winding Up / Ruling on Application to Extend Provisional Liquidation to Permit Preparation of a Scheme of Arrangement
Outcome
Adjournment granted; provisional liquidations extended for six months to allow preparation of a scheme of arrangement
Legal Topics
Provisional Liquidation, Scheme of Arrangement, Adjournment/extension, Creditors' Interests
Source Language
EN
Company Law Insolvency Insurance Law Civil Procedure Provisional Liquidation Scheme of Arrangement Adjournment/extension Creditors' Interests

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Parties

HIH Insurance (Asia) Limited (Provisional Liquidators Appointed)

Company (subject)

HIH Holdings (Asia) Limited (Provisional Liquidators Appointed)

Company (subject)

FAI First Pacific Insurance Company Limited (Provisional Liquidators Appointed)

Company (subject)

HIH Casualty and General Insurance (Asia) Limited (Managers Appointed)

Company (subject)

Provisional Liquidators / Managers

Petitioner

Official Receiver

Respondent

Insurance Authority / Commissioner of Insurance

Interested Party

Procedural Posture

Companies Winding Up / Ruling on Application to Extend Provisional Liquidation to Permit Preparation of a Scheme of Arrangement

Legal Issues

  1. 1 Whether to extend provisional liquidation or place the companies into formal liquidation
  2. 2 Whether remaining in provisional liquidation for six months would prejudice creditors
  3. 3 Whether a scheme of arrangement is an appropriate mechanism for these insolvent insurance companies

Ratio Decidendi

Given the demonstrable cost savings, limited and rational six month period, absence of prejudice to creditors, ongoing consultation with a creditors' committee and the Commissioner of Insurance's lack of objection, the court exercised its discretion to extend the provisional liquidations for six months to permit preparation and presentation of a scheme of arrangement.

Court Disposition

Adjournment granted; provisional liquidations extended for six months to allow preparation of a scheme of arrangement

Orders

  • The provisional liquidations of the four companies are extended for six months to permit preparation and presentation of a scheme of arrangement