RE BMAINTAIN PROFITS LTD

RE BMAINTAIN PROFITS LTD

The court held that provisional liquidators' remuneration should be charged on a Panel A time-cost basis and paid out of the parent companies' assets; further, acting within the express powers in the Appointment Order, the provisional liquidators may, as shareholders of BF, pass resolutions for BF to indemnify them and to have BF pay their remuneration and counsel costs provided (i) the indemnity only covers actions in relation to BF and (ii) the resolutions cease to apply if a petition to wind up BF is presented; the shareholders' resolutions of 6 November 2002 fall within the provisional liquidators' powers in the Appointment Order; and the provisional liquidators were granted leave to...

Citation
RE BMAINTAIN PROFITS LTD
Parties
Company Subject to Winding Up Petition: Maintain Profits Limited; Company Subject to Winding Up Petition: Myriad Gold Corporation; Petitioner and Contributory (presented Petitions): Law Wai Duen Nina (LWD); Opposing Contributory and Director: Chan Shiu Chick (CSC); Subsidiary/asset of Maintain Profits and Myriad Gold: B F Construction Company Limited (BF); Joint and Several Provisional Liquidators (appointed): Charles Chan Wai Dune and James Wardell
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
20 August 2003
Case Number
HCCW345/2002
Procedural Posture
Companies (winding Up) / Interlocutory Application for Directions on Provisional Liquidators' Powers and Remuneration (summonses)
Outcome
Summonses granted in part with directions and powers conferred on provisional liquidators subject to qualifications
Legal Topics
Winding Up, Provisional Liquidators, Remuneration of Officeholders, Shareholders' Resolutions, Indemnity, Director Deadlock
Source Language
EN
Insolvency Law Company Law Civil Procedure Winding Up Provisional Liquidators Remuneration of Officeholders Shareholders' Resolutions Indemnity +1 more

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Parties

Maintain Profits Limited

Company Subject to Winding Up Petition

Myriad Gold Corporation

Company Subject to Winding Up Petition

Law Wai Duen Nina (LWD)

Petitioner and Contributory (presented Petitions)

Chan Shiu Chick (CSC)

Opposing Contributory and Director

B F Construction Company Limited (BF)

Subsidiary/asset of Maintain Profits and Myriad Gold

Charles Chan Wai Dune and James Wardell

Joint and Several Provisional Liquidators (appointed)

Procedural Posture

Companies (winding Up) / Interlocutory Application for Directions on Provisional Liquidators' Powers and Remuneration (summonses)

Legal Issues

  1. 1 Whether provisional liquidators may be remunerated on a Panel A time-cost basis and charged to assets of the parent companies or subsidiary BF
  2. 2 Whether provisional liquidators, as the sole shareholders of BF, may pass shareholders' resolutions to cause BF to indemnify them and to pay their remuneration and costs out of BF's assets
  3. 3 Validity of shareholders' resolutions passed without formal board requisition and applicability of section 116B and the Duomatic principle

Ratio Decidendi

The court held that provisional liquidators' remuneration should be charged on a Panel A time-cost basis and paid out of the parent companies' assets; further, acting within the express powers in the Appointment Order, the provisional liquidators may, as shareholders of BF, pass resolutions for BF to indemnify them and to have BF pay their remuneration and counsel costs provided (i) the indemnity only covers actions in relation to BF and (ii) the resolutions cease to apply if a petition to wind up BF is presented; the shareholders' resolutions of 6 November 2002 fall within the provisional liquidators' powers in the Appointment Order; and the provisional liquidators were granted leave to...

Court Disposition

Summonses granted in part with directions and powers conferred on provisional liquidators subject to qualifications

Orders

  • Remuneration of the provisional liquidators to be charged on a time-cost basis at the standard Panel A scale agreed between the Official Receiver and the Hong Kong Society of Accountants and to be paid out of the assets of Maintain Profits or Myriad Gold as appropriate
  • Provisional liquidators may, as shareholders of BF by shareholders' resolution, cause BF to indemnify the provisional liquidators and provide for their remuneration and solicitors' costs to be charged to BF provided that (a) such resolutions cease to apply if a petition to wind up BF is presented and (b) the...