FANCYMIND INC v. FAKO INTERNATIONAL CORPORATION AND OTHERS

FANCYMIND INC v. FAKO INTERNATIONAL CORPORATION AND OTHERS

The court ordered distribution of the sale proceeds in accordance with the shareholding structures because the companies are solvent, the directors' proposed disposition was within their powers and an intelligent and honest person could view it as necessary or expedient in the companies' interests, and no compelling evidence was shown that the distribution would injure the companies.

Citation
FANCYMIND INC v. FAKO INTERNATIONAL CORPORATION AND OTHERS
Parties
Petitioner: WINBLESS INC; 1st Respondent: CENTRAL BILLION INC; 2nd Respondent: AMAZING INC; 3rd Respondent: BRIGHT STAR CORPORATION; 4th Respondent: TOPEDGE INC; 5th Respondent: WELLJOY INC; 6th Respondent: GRAND TEXTILE COMPANY, LIMITED; Petitioner: FANCYMIND INC; 1st Respondent: FAKO INTERNATIONAL CORPORATION; 7th Respondent: INTERNATIONAL TEXTILE COMPANY, LIMITED
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
16 December 2013
Case Number
HCCW373/2011
Procedural Posture
Companies (winding Up) / Post Validation Order Determination of Distribution of Sale Proceeds (decision)
Outcome
Distribution of the sales proceeds ordered in accordance with the shareholding structure of each company; costs of the applications to be paid out of the assets of the respective companies and taxed if not agreed.
Legal Topics
Winding Up, Validation Order Under Section 182, Distribution of Sale Proceeds, Directors' Powers, Shareholder Disputes
Source Language
EN
Company Law Insolvency Law Equity/trusts Winding Up Validation Order Under Section 182 Distribution of Sale Proceeds Directors' Powers Shareholder Disputes

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Parties

WINBLESS INC

Petitioner

CENTRAL BILLION INC

1st Respondent

AMAZING INC

2nd Respondent

BRIGHT STAR CORPORATION

3rd Respondent

TOPEDGE INC

4th Respondent

WELLJOY INC

5th Respondent

GRAND TEXTILE COMPANY, LIMITED

6th Respondent

FANCYMIND INC

Petitioner

FAKO INTERNATIONAL CORPORATION

1st Respondent

INTERNATIONAL TEXTILE COMPANY, LIMITED

7th Respondent

Procedural Posture

Companies (winding Up) / Post Validation Order Determination of Distribution of Sale Proceeds (decision)

Legal Issues

  1. 1 Whether sale proceeds of company properties may be distributed to shareholders notwithstanding pending winding-up petitions
  2. 2 Whether the directors' proposed disposition falls within their powers and is in the interests of the company
  3. 3 Whether distribution would prejudice creditors or give rise to unlawful preference or future litigation by liquidators

Ratio Decidendi

The court ordered distribution of the sale proceeds in accordance with the shareholding structures because the companies are solvent, the directors' proposed disposition was within their powers and an intelligent and honest person could view it as necessary or expedient in the companies' interests, and no compelling evidence was shown that the distribution would injure the companies.

Court Disposition

Distribution of the sales proceeds ordered in accordance with the shareholding structure of each company; costs of the applications to be paid out of the assets of the respective companies and taxed if not agreed.

Orders

  • Distribution of sale proceeds to be made in accordance with the shareholding structures of Grand Textile Company, Limited and International Textile Company, Limited
  • Costs of the applications to be paid out of the assets of the respective companies