ONC Corporate Disputes and Insolvency Quarterly
Business Law News
ONC Lawyers
Hong Kong
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Dear Clients and Friends, This special newsletter aims to regularly update practitioners on important and noteworthy cases in the areas of corporate disputes and insolvency in Hong Kong, the UK and other common law countries. In this issue, we have highlighted: |
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· 8 Corporate Insolvency Cases |
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Our selection of cases and our analysis of them may not be exhaustive. Your comments and suggestions are always most welcome. Please feel free to contact me at ludwig.ng@onc.hk Best regards, Ludwig Ng Partner, Solicitor Advocate ONC Lawyers
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HEADLINES OF THIS ISSUE |
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Corporate Insolvency Cases |
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1. Does removing an insolvent party from a joint venture infringe the anti-deprivation rule? |
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2. Where a CVL is already in progress and the majority of the creditors it to continue, the petitioner must show some valid reason or special circumstance if the petitioner wishes to convert the CVL to compulsory liquidation |
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Re China City Construction (International) Co Ltd [2019] HKCFI 1617 |
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3. A company is prevented from arguing that it has a bona fide defence on substantial grounds to oppose a winding-up petition, if it previously has had the opportunity to argue, but decided entirely for its own reasons not to do so |
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4. Hong Kong Court refuses to stay a shareholder dispute petition to arbitration, finding that the substance of the dispute between the parties concerns breach of the articles and of the fiduciary duty of directors, which are governed by ordinary company law |
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Dickson Holdings Enterprise Co Ltd v Moravia CV and Others [2019] HKCFI 1424 |
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5. Court appointed provisional liquidators to Hua Han Health Industry Holdings Ltd, noting significant grounds for concern about the Company, and its operation and management over recent historical periods |
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Cypress House Capital Ltd v Hua Han Health Industry Holdings Ltd [2019] HKCFI 1826 |
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6. The Privy Council upheld the decisions of the Cayman Islands Grand Court and Court of Appeal in finding that certain redemption payments received by Skandinaviska Enskilda Banken AB (Publ) from Weavering Macro Fixed Income Fund Ltd shortly prior to the Company’s liquidation constituted voidable preferences |
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7. English Court of Appeal allowed damages in addition to setting aside void disposition in insolvency |
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8. Arbitration or Winding up? Lasmos and But Ka Cho considered by the High Court |
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Cross-border Insolvency Cases |
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9. English High Court held that section 236 of the Insolvency Act 1986 (the private examination provision) has extraterritorial effect |
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10. Singapore Court of Appeal set out the test for recognising a foreign bankruptcy order |
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Restructuring Cases |
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11. Modifications to a scheme and scheme document are unobjectionable, if the modifications are either sufficiently explained prior to a scheme meeting, or if at the scheme meeting they are sufficiently minor |
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Re The Hong Kong Building and Loan Agency Ltd [2019] HKCFI 2088 |
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Corporate Disputes Cases |
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12. Singapore Court of Appeal rejected the suggestion that third-party offers invariably represent the “best evidence” of the shares’ fair market value |
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Abhilash s/o Kunchian Krishnan v Yeo Hock Huat and another [2019] SGCA 14 |
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13. Court of Appeal upheld that reasons are not required for the removal of a director |
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14. The Court has power to grant interim payment order under ss.724 and 725 of the Companies Ordinance (Cap 622) |
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15. Moulin director found to be in breach of her duty to exercise care and skill in performing her roles, as she failed to enquire and investigate in the face of red flags |
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Moulin Global Eyecare Holdings Ltd v Lee Sin Mei Olivia [2019] 3 HKLRD 833 |
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16. English High Court held directors’ liability as to unlawful distribution is fault-based rather than strict |
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17. Proving dishonesty and “blind-eye knowledge” in fraud-related causes of action against bank creditor |
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Bankruptcy Cases |
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18. Is arbitration clause an absolute bar to winding-up petition? - The latest position after the Lasmos case |
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19. Court ordered co-trustee be removed where it is clear that the working relationship between the joint and several trustees has completely broken down |
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20. Court held that it is not right to invoke section 29 of the Bankruptcy Ordinance, where no assets can be recouped to enhance the value of the bankruptcy estate |
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21. Material non-disclosure in applying for an order for substituted service of the bankruptcy petition could result in the bankruptcy order being annulled |
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22. The general fitness of a trustee in bankruptcy is a disciplinary matter. It is not open to the Official Receiver to apply administrative actions to suspend the trustee’s practice without invoking the disciplinary proceedings |
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23. In determining whether a creditor is a secured creditor in the context of the bankruptcy legislation, the Court shall look at whether their security would benefit the general bankruptcy estate if it was surrendered |
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Promontoria (Chestnut) Limited v Charles Phelan Bell, Angela Bell [2019] EWHC 1581 (Ch) |
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24. English High Court found a second application brought by a bankrupt to annul his bankruptcy an abuse of process where the first application had been struck out for the bankrupt’s failure to comply with court directions |
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