RE KOF MEDIA CORP. LTD

RE KOF MEDIA CORP. LTD

There was no bona fide dispute on substantial grounds: the US$750,000 was a loan under the Loan Agreement; the Company breached the reorganisation obligations under clause 6, constituting an event of default entitling the petitioner to accelerate repayment under clause 8.2; independently, clause 5.3(b) permitted...

Source-derived case information.

Citation
RE KOF MEDIA CORP. LTD
Parties
Petitioner: China Opportunity S.A. SICAR; Respondent (the Company): KOF Media Corp. Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
15 September 2009
Case Number
HCCW544/2008
Procedural Posture
Winding Up Petition / Judgment
Outcome
Order made to wind up KOF Media Corp. Limited
Legal Topics
Winding Up, Statutory Demand, Repayment Demand, Conversion Right, Reorganisation Obligations, Breach of Contract, Force Majeure, Frustration, Common Mistake
Source Language
en
Insolvency Company Law Contract Law Foreign Investment/prc Regulatory Law Winding Up Statutory Demand Repayment Demand Conversion Right +5 more

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Parties

China Opportunity S.A. SICAR

Petitioner

KOF Media Corp. Limited

Respondent (the Company)

Procedural Posture

Winding Up Petition / Judgment

Legal Issues

  1. 1 Whether the US$750,000 was a loan or an equity investment
  2. 2 Whether there existed a bona fide dispute on substantial grounds to resist the winding-up petition
  3. 3 Whether the Company breached reorganisation obligations under the Option Agreement clause 6

Ratio Decidendi

There was no bona fide dispute on substantial grounds: the US$750,000 was a loan under the Loan Agreement; the Company breached the reorganisation obligations under clause 6, constituting an event of default entitling the petitioner to accelerate repayment under clause 8.2; independently, clause 5.3(b) permitted repayment demand where conversion rights were not exercised; the petitioner's PRC expert evidence showed establishment of a JV/WOFE was legally possible and the Company produced no contrary expert evidence, therefore winding up was ordered.

Court Disposition

Order made to wind up KOF Media Corp. Limited

Orders

  • Company to be wound up pursuant to the petition
  • Petitioner's costs to be paid out of the Company's assets