Re S.K. LUK Construction Co. Ltd.

Re S.K. LUK Construction Co. Ltd.

Applying the rights test, the court found no dissimilarity of legal rights sufficient to require separate classes; the inclusion of internal creditors did not produce confiscation or injustice; independent creditors showed substantial support and disclosure and procedural irregularities were not such as to vitiate the meetings; accordingly the court exercised its discretion to sanction all 25 schemes, subject to the stated condition precedent.

Citation
Re S.K. LUK Construction Co. Ltd.
Parties
Petitioner: UDL Holdings Limited; Petitioner: UDL Argos Engineering & Heavy Industries Co. Ltd; Petitioner: Everpoint Company Limited; Petitioner: Econo Plant Hire Company Limited; Petitioner: East Coast Towing Limited; Petitioner: Universal Dockyard Limited; Petitioner: UDL Ship Management Limited; Petitioner: UDL Marine Pte Limited; Petitioner: UDL Marine Operation Limited; Petitioner: UDL Contracting Limited; Petitioner: UDL Civil Contractors Limited; Petitioner: UDL Employment Services Limited; Petitioner: Wellful Time Limited; Petitioner: UDL Steel Fabricators & Shipbuilders Company Limited; Petitioner: UDL Management Limited; Petitioner: UDL Investment Limited; Petitioner: UDL E & M (BVI) Limited; Petitioner: UDL Dredging Limited; Petitioner: S.K. LUK Construction Company Limited; Petitioner: Keen Yield Investment Limited; Petitioner: Graceful Ease Investment Limited; Petitioner: Full Keen Investment Limited; Petitioner: Faith On International Limited; Petitioner: Fairking Transportation Limited; Petitioner: Exact Profit Limited; Opposing Creditor: Nishimatsu Construction Company Limited; Opposing Preferential Creditors: Opposing Preferential Creditors (represented); Creditor: American Home Assurance Company (AHAC); Creditor: HSBC (creditor, did not appear); Judge: Hon Le Pichon J
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
18 April 2000
Case Number
HCMP426/2000
Procedural Posture
Companies Ordinance Scheme of Arrangement Under Cap.32 / Sanction Hearing and Judgment (sanction Stage)
Outcome
Court sanctioned the 25 Schemes of Arrangement (sanction granted)
Legal Topics
Scheme of Arrangement, Classification of Creditors, Voting, Preferential Creditors, Secured Creditors, Disputed Claims, Moratorium, Court Discretion
Source Language
EN
Company Law Insolvency Restructuring Scheme of Arrangement Classification of Creditors Voting Preferential Creditors Secured Creditors +3 more

Case Brief

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Parties

UDL Holdings Limited

Petitioner

UDL Argos Engineering & Heavy Industries Co. Ltd

Petitioner

Everpoint Company Limited

Petitioner

Econo Plant Hire Company Limited

Petitioner

East Coast Towing Limited

Petitioner

Universal Dockyard Limited

Petitioner

UDL Ship Management Limited

Petitioner

UDL Marine Pte Limited

Petitioner

UDL Marine Operation Limited

Petitioner

UDL Contracting Limited

Petitioner

UDL Civil Contractors Limited

Petitioner

UDL Employment Services Limited

Petitioner

Wellful Time Limited

Petitioner

UDL Steel Fabricators & Shipbuilders Company Limited

Petitioner

UDL Management Limited

Petitioner

UDL Investment Limited

Petitioner

UDL E & M (BVI) Limited

Petitioner

UDL Dredging Limited

Petitioner

S.K. LUK Construction Company Limited

Petitioner

Keen Yield Investment Limited

Petitioner

Graceful Ease Investment Limited

Petitioner

Full Keen Investment Limited

Petitioner

Faith On International Limited

Petitioner

Fairking Transportation Limited

Petitioner

Exact Profit Limited

Petitioner

Nishimatsu Construction Company Limited

Opposing Creditor

Opposing Preferential Creditors (represented)

Opposing Preferential Creditors

American Home Assurance Company (AHAC)

Creditor

HSBC (creditor, did not appear)

Creditor

Hon Le Pichon J

Judge

Procedural Posture

Companies Ordinance Scheme of Arrangement Under Cap.32 / Sanction Hearing and Judgment (sanction Stage)

Legal Issues

  1. 1 Whether internal creditors (group companies) could be treated as part of a single class and vote at the creditors meeting
  2. 2 Whether preferential creditors required a separate class meeting
  3. 3 Whether disputed creditor Nishimatsu should have been allowed to vote for its claimed amount

Ratio Decidendi

Applying the rights test, the court found no dissimilarity of legal rights sufficient to require separate classes; the inclusion of internal creditors did not produce confiscation or injustice; independent creditors showed substantial support and disclosure and procedural irregularities were not such as to vitiate the meetings; accordingly the court exercised its discretion to sanction all 25 schemes, subject to the stated condition precedent.

Court Disposition

Court sanctioned the 25 Schemes of Arrangement (sanction granted)

Orders

  • Schemes of Arrangement sanctioned for the 25 companies before the court
  • Sanction conditional on fulfillment of the condition precedent of Stock Exchange approval by 30 April 2000 or such later date as the court may allow