RE UDL HOLDINGS LTD AND OTHERS

RE UDL HOLDINGS LTD AND OTHERS

The court sanctioned the Modifications in respect of the Company and 23 Scheme Participating Subsidiaries because the meetings were properly constituted, the explanatory statement was sufficiently fair, and the result fairly reflected creditors' views; however the court has no jurisdiction to sanction modifications as regards Dockyard without the consent of its liquidators, and because the Disputed Assets had not been vested in Newco or otherwise transferred at the commencement of Dockyard's winding up they constitute assets of Dockyard to be dealt with in the liquidation rather than trust assets under the Scheme.

Citation
RE UDL HOLDINGS LTD AND OTHERS
Parties
Scheme Company: UDL Holdings Limited; Scheme Participating Subsidiary (in Liquidation): Universal Dockyard Limited; Scheme Administrator: Matthew Finbarr O'Driscoll; Liquidators of Universal Dockyard Limited: Simon Richard Blade and Bruno Arboit; Opposing Creditor: Fonfair Company Limited; Opposing Creditor: Showa Leasing (Hong Kong) Limited; Major Shareholder / Purchaser Under Proposed Global Solution: Harbour Front Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
7 June 2006
Case Number
HCMP431/2000
Procedural Posture
Companies Ordinance S166 Petition to Sanction Modifications to Schemes of Arrangement and S200(3) Directions Summons in Winding Up / Judgment (court of First Instance) Handed Down 7 June 2006
Outcome
Modifications sanctioned in respect of UDL Holdings Limited and 23 Scheme Participating Subsidiaries; petition as to Universal Dockyard Limited adjourned; Disputed Assets held to be assets of Universal Dockyard Limited for purposes of its winding up and not to be dealt with pursuant to the Schemes or Modifications;...
Legal Topics
Scheme of Arrangement, Modification of Scheme, Winding Up, Trust Over Assets, Creditor Voting, Disclosure to Creditors, Liquidator Consent, Quistclose Trust
Source Language
EN
Company Law Insolvency Trusts Commercial Law Scheme of Arrangement Modification of Scheme Winding Up Trust Over Assets +4 more

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Parties

UDL Holdings Limited

Scheme Company

Universal Dockyard Limited

Scheme Participating Subsidiary (in Liquidation)

Matthew Finbarr O'Driscoll

Scheme Administrator

Simon Richard Blade and Bruno Arboit

Liquidators of Universal Dockyard Limited

Fonfair Company Limited

Opposing Creditor

Showa Leasing (Hong Kong) Limited

Opposing Creditor

Harbour Front Limited

Major Shareholder / Purchaser Under Proposed Global Solution

Procedural Posture

Companies Ordinance S166 Petition to Sanction Modifications to Schemes of Arrangement and S200(3) Directions Summons in Winding Up / Judgment (court of First Instance) Handed Down 7 June 2006

Legal Issues

  1. 1 Whether the proposed modifications to the schemes of arrangement should be sanctioned under s166
  2. 2 Whether Unencumbered Assets and Accounts Receivable of Universal Dockyard Limited constitute assets of Dockyard in its winding up or are held on trust pursuant to the schemes
  3. 3 Whether votes of a major shareholder (Harbour Front) should be discounted as not fairly representing class views

Ratio Decidendi

The court sanctioned the Modifications in respect of the Company and 23 Scheme Participating Subsidiaries because the meetings were properly constituted, the explanatory statement was sufficiently fair, and the result fairly reflected creditors' views; however the court has no jurisdiction to sanction modifications as regards Dockyard without the consent of its liquidators, and because the Disputed Assets had not been vested in Newco or otherwise transferred at the commencement of Dockyard's winding up they constitute assets of Dockyard to be dealt with in the liquidation rather than trust assets under the Scheme.

Court Disposition

Modifications sanctioned in respect of UDL Holdings Limited and 23 Scheme Participating Subsidiaries; petition as to Universal Dockyard Limited adjourned; Disputed Assets held to be assets of Universal Dockyard Limited for purposes of its winding up and not to be dealt with pursuant to the Schemes or Modifications;...

Orders

  • Sanction modifications to the Schemes for UDL Holdings Limited and the 23 Scheme Participating Subsidiaries (excluding Universal Dockyard Limited)
  • Adjourn petition for sanction as to Universal Dockyard Limited to a date to be fixed, not earlier than 28 days, for liquidators to ascertain creditors' views