RE TEXXAN INDUSTRIES LTD

RE TEXXAN INDUSTRIES LTD

Petitions dismissed because applicant failed to show due cause for removal: no evidence of actual bias or unfitness by the joint liquidators; majority in value of creditors supported continuation; liquidators had integrity, competence and knowledge of the matters; replacement would cause delay and additional costs detrimental to the liquidation; therefore compulsory winding up/removal not in interests of liquidation.

Citation
RE TEXXAN INDUSTRIES LTD
Parties
Petitioner: John Koon; Company (in Voluntary Liquidation): Texxan Industries Limited; Company (in Voluntary Liquidation): Chino Industries Limited; Joint Provisional Liquidators/respondents: M.C. Nacson & E.M. McMillan (Arthur Andersen & Co.); Supporting Creditor/major Creditor Group: Yue Xiu Group; Supporting Creditor: Hongkong & Shanghai Banking Corporation Limited; Official Receiver: Official Receiver
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
25 September 1990
Case Number
HCCW151/1990
Procedural Posture
Companies (winding Up) / Petitions for Compulsory Winding Up Heard; Judgment on Application to Dismiss Petitions and Remove Liquidators
Outcome
Petitions for compulsory winding up dismissed
Legal Topics
Winding Up, Removal of Liquidator, Conflict of Interest and Independence, Fraudulent Preference (s.266 Companies Ordinance), Money Lenders Legislation (s.18 Money Lenders Ordinance)
Source Language
EN
Company Law Insolvency Law Banking Law Procedural Law Winding Up Removal of Liquidator Conflict of Interest and Independence Fraudulent Preference (s.266 Companies Ordinance) +1 more

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Parties

John Koon

Petitioner

Texxan Industries Limited

Company (in Voluntary Liquidation)

Chino Industries Limited

Company (in Voluntary Liquidation)

M.C. Nacson & E.M. McMillan (Arthur Andersen & Co.)

Joint Provisional Liquidators/respondents

Yue Xiu Group

Supporting Creditor/major Creditor Group

Hongkong & Shanghai Banking Corporation Limited

Supporting Creditor

Official Receiver

Official Receiver

Procedural Posture

Companies (winding Up) / Petitions for Compulsory Winding Up Heard; Judgment on Application to Dismiss Petitions and Remove Liquidators

Legal Issues

  1. 1 Whether joint provisional liquidators should be removed for lack of independence or conflict of interest
  2. 2 Whether payments to banks amounted to voidable/fraudulent preferences under s.266 Companies Ordinance
  3. 3 Whether loans advanced by related parties were unenforceable under Money Lenders Ordinance s.18

Ratio Decidendi

Petitions dismissed because applicant failed to show due cause for removal: no evidence of actual bias or unfitness by the joint liquidators; majority in value of creditors supported continuation; liquidators had integrity, competence and knowledge of the matters; replacement would cause delay and additional costs detrimental to the liquidation; therefore compulsory winding up/removal not in interests of liquidation.

Court Disposition

Petitions for compulsory winding up dismissed

Orders

  • Petitions dismissed (CWU 151 of 1990 and CWU 152 of 1990)
  • Order nisi for costs to the joint liquidators