RE GLOBAL HOLDINGS HK LTD

RE GLOBAL HOLDINGS HK LTD

Court approved pre‑appointment fees under s182 as being incurred bona fide in creditors' interests; held that fees and disbursements incurred in administering client money may be paid out of those trust assets; granted interim payment of 70% (rather than 75% sought) of the provisional liquidators' fees and disbursements pending taxation; held that although rules 169‑179 do not apply to provisional liquidators appointed under s193 or continued under s194(1)(aa), agents' costs should in future be subject to taxation or appropriate court oversight (taxation under s67 LPO and Maxwell principles remains applicable) to protect company assets and creditors' interests.

Citation
RE GLOBAL HOLDINGS HK LTD
Parties
Company (in Liquidation): MF Global Hong Kong Limited; Company (in Liquidation): MF Global Holdings HK Limited; Applicants (provisional Liquidators): Provisional Liquidators
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
7 May 2012
Case Number
HCCW357/2011
Procedural Posture
Companies (winding‑up) Nos 356/2011 and 357/2011 (companies Ordinance Cap 32) / Summons for Approval and Interim Payment of Provisional Liquidators' Fees and Expenses Following Appointment and Winding‑up
Outcome
Application partly allowed
Legal Topics
Provisional Liquidation, Interim Payment of Liquidators' Fees, Payment From Client Trust Money, Taxation of Agents' Costs, Section 182 Approval
Source Language
EN
Company Law Insolvency Trusts Civil Procedure Costs Law Provisional Liquidation Interim Payment of Liquidators' Fees Payment From Client Trust Money +2 more

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Parties

MF Global Hong Kong Limited

Company (in Liquidation)

MF Global Holdings HK Limited

Company (in Liquidation)

Provisional Liquidators

Applicants (provisional Liquidators)

Procedural Posture

Companies (winding‑up) Nos 356/2011 and 357/2011 (companies Ordinance Cap 32) / Summons for Approval and Interim Payment of Provisional Liquidators' Fees and Expenses Following Appointment and Winding‑up

Legal Issues

  1. 1 Whether fees incurred prior to presentation of the petition can be validated under section 182 of the Companies Ordinance
  2. 2 Whether fees and disbursements incurred in administering client money (trust assets) can be paid out of those client monies
  3. 3 Whether provisional liquidators and their agents are entitled to interim payments pending taxation and on what terms/percentage

Ratio Decidendi

Court approved pre‑appointment fees under s182 as being incurred bona fide in creditors' interests; held that fees and disbursements incurred in administering client money may be paid out of those trust assets; granted interim payment of 70% (rather than 75% sought) of the provisional liquidators' fees and disbursements pending taxation; held that although rules 169‑179 do not apply to provisional liquidators appointed under s193 or continued under s194(1)(aa), agents' costs should in future be subject to taxation or appropriate court oversight (taxation under s67 LPO and Maxwell principles remains applicable) to protect company assets and creditors' interests.

Court Disposition

Application partly allowed

Orders

  • Approval under section 182 for payment of fees incurred prior to 2 November 2011 in instructing KPMG and Linklaters
  • Client money costs and related fees and disbursements to be payable out of client (trust) money collected