RE LDK SOLAR CO., LTD (in provisional liquidation)

Parties

Procedural Posture

Scheme of Arrangement Under S.673 Companies Ordinance (cap.622) / Application for Sanction; Reasons for Decision (sanction Granted 18 November 2014)

Legal Issues

1. 1 Whether the Hong Kong court has jurisdiction to sanction schemes of arrangement under s.673 in respect of companies incorporated outside Hong Kong
2. 2 Whether the three core requirements applicable in winding up unregistered/foreign companies are preconditions to jurisdiction to sanction a scheme or relate only to the exercise of discretion
3. 3 What connecting factors constitute a sufficient connection with Hong Kong to justify sanctioning a scheme affecting foreign companies

Ratio Decidendi

The Hong Kong court has power to sanction schemes under s.673 in relation to foreign companies where there is a sufficient connection between the scheme and Hong Kong; the statutory jurisdiction to wind up unregistered companies under s.327 is wide and the three core requirements operate as factors in the exercise of discretion rather than absolutes limiting jurisdiction; on the facts the governing law of relevant debts, presence of creditors domiciled in Hong Kong, registration and bank links, Hong Kong-resident director, and the inter-conditional multi-jurisdictional restructuring together constituted a sufficient connection to justify sanctioning the Hong Kong schemes.

Court Disposition

Hong Kong schemes sanctioned by the Court of First Instance on 18 November 2014

Orders

• Sanctioned the three Hong Kong schemes of arrangement pursuant to s.673 Companies Ordinance (Cap.622) in respect of LDK Solar Co., Ltd, LDK Silicon & Chemical Technology Co., Ltd and LDK Silicon Holding Co., Limited
• Sanction conditional as set out in the schemes (including inter-conditionality with Cayman schemes and recognition steps in other jurisdictions) and registrable in accordance with s.673(6)