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

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

The Hong Kong court will exercise its power to sanction a scheme in respect of foreign companies only where there is a sufficient connection with Hong Kong such that sanctioning the scheme will have a substantial effect there; the established three 'core requirements' for winding up foreign companies relate to the exercise of the winding-up discretion rather than the existence of jurisdiction to entertain a scheme; on the facts the connections (governing law of claims being Hong Kong law, presence of Hong Kong-domiciled preferred creditors, registration of LDK Silicon as a non-Hong Kong company, Hong Kong bank accounts and subsidiaries, Hong Kong-resident director, and the unitary...

Citation
RE LDK SOLAR CO., LTD (in provisional liquidation)
Parties
Applicant (scheme Company): LDK Solar Co., Ltd (in provisional liquidation); Applicant (scheme Company): LDK Silicon & Chemical Technology Co., Limited; Applicant (scheme Company): LDK Silicon Holding Co., Limited; Opposing Creditor: Apollo Asia Investment Limited; Creditors/respondents: Senior note guarantors
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
10 December 2014
Case Number
HCMP2216/2014
Procedural Posture
Sanction of Schemes of Arrangement Under Companies Ordinance / Hearing to Sanction Schemes and Reasons on Jurisdiction (schemes Sanctioned 18 November 2014)
Outcome
Three schemes of arrangement sanctioned by the High Court in respect of LDK Solar Co., Ltd, LDK Silicon & Chemical Technology Co., Limited and LDK Silicon Holding Co., Limited
Legal Topics
Scheme of Arrangement, Jurisdiction to Sanction Foreign Company Schemes, Winding Up of Unregistered Companies, Choice of Governing Law, Comity
Source Language
EN
Company Law Insolvency Private International Law Cross Border Restructuring Scheme of Arrangement Jurisdiction to Sanction Foreign Company Schemes Winding Up of Unregistered Companies Choice of Governing Law +1 more

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Parties

LDK Solar Co., Ltd (in provisional liquidation)

Applicant (scheme Company)

LDK Silicon & Chemical Technology Co., Limited

Applicant (scheme Company)

LDK Silicon Holding Co., Limited

Applicant (scheme Company)

Apollo Asia Investment Limited

Opposing Creditor

Senior note guarantors

Creditors/respondents

Procedural Posture

Sanction of Schemes of Arrangement Under Companies Ordinance / Hearing to Sanction Schemes and Reasons on Jurisdiction (schemes Sanctioned 18 November 2014)

Legal Issues

  1. 1 Whether Hong Kong court has jurisdiction to sanction schemes of arrangement in respect of companies incorporated outside Hong Kong
  2. 2 Whether the three 'core requirements' for winding up foreign (unregistered) companies are preconditions to the court's jurisdiction to sanction a scheme
  3. 3 What connecting factors are sufficient to justify exercise of jurisdiction to sanction a foreign company's scheme

Ratio Decidendi

The Hong Kong court will exercise its power to sanction a scheme in respect of foreign companies only where there is a sufficient connection with Hong Kong such that sanctioning the scheme will have a substantial effect there; the established three 'core requirements' for winding up foreign companies relate to the exercise of the winding-up discretion rather than the existence of jurisdiction to entertain a scheme; on the facts the connections (governing law of claims being Hong Kong law, presence of Hong Kong-domiciled preferred creditors, registration of LDK Silicon as a non-Hong Kong company, Hong Kong bank accounts and subsidiaries, Hong Kong-resident director, and the unitary...

Court Disposition

Three schemes of arrangement sanctioned by the High Court in respect of LDK Solar Co., Ltd, LDK Silicon & Chemical Technology Co., Limited and LDK Silicon Holding Co., Limited

Orders

  • Schemes of arrangement pursuant to s.673 Companies Ordinance (Cap.622) sanctioned (18 November 2014)
  • Sanction is conditional upon the terms of the schemes including inter-conditionality with the Cayman schemes and other stated conditions in the schemes