Hong Kong Case Law: Decisions & Judgments | LexChat

Topic

Special reserve

Legal area

Court

17 Dec 2004

RE HONG KONG CABLE TELEVISION LTD

Citation

RE HONG KONG CABLE TELEVISION LTD
Court

Court of First Instance
Case number

HCMP3072/2004

The reduction of the company's issued share capital was confirmed because the shareholders were treated equitably, the reduction was properly explained and for a legitimate discernible purpose (elimination of accumulated deficit and capitalisation of debt), and creditors' interests were safeguarded by the company's detailed undertakings; procedural requirements under the Companies Ordinance were complied with.
17 Dec 2003

RE GUANGDONG INVESTMENT LTD

Citation

RE GUANGDONG INVESTMENT LTD
Court

Court of First Instance
Case number

HCMP4867/2003

The court confirmed the reduction because the statutory tests were satisfied: shareholders (including preference shareholders) were equitably treated and properly informed; the reduction had a clear discernible purpose (to eliminate accumulated losses and expedite dividends); and creditors were adequately protected by a cap-limited special reserve addressing non-permanent losses and by a separate trust account funded with HK$34,000,000 for non-consenting creditors, such safeguards permitting the court to dispense with settling a formal creditor list under the Companies Ordinance.