Re Sheen Benefit International Ltd.
Read the full judgment text of HCCW 665/1999 on BabelCite. This High Court CFI judgment was delivered on 15 November 1999.
1. This petition was presented by the Hong Kong and Shanghai Bank on 26 July 1999 in respect of banking facilities granted to the Company which as at 13 July stood at approximately US$1.39 million and a little over HK$8,000. The Company has not repaid these amounts.
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HCCW000665/1999 HCCW 665/99 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE COMPANIES (WINDING-UP) NO. 665 OF 1999 ----------------------
----------------------- Coram : The Hon Mrs Justice Le Pichon in Court Date of Hearing : 15 November 1999 Date of Judgment : 15 November 1999 --------------------------- J U D G M E N T --------------------------- 1. This petition was presented by the Hong Kong and Shanghai Bank on 26 July 1999 in respect of banking facilities granted to the Company which as at 13 July stood at approximately US$1.39 million and a little over HK$8,000. The Company has not repaid these amounts. 2. The petition first came on for hearing on 4 October when the court was informed that a rescue plan was on the horizon. A three-week adjournment was sought and granted. At the adjourned hearing on 25 October, a further adjournment was granted as a financial report critical for the proposed rescue was then in the course of being prepared. That report was apparently made available on 10 November. 3. The Company is not legally represented and appears by its director, Mr Cheng Yuk Ping. There is exhibited to an affirmation of Wong Lai Nei which was handed to court this morning what was described as a "Limited Scope Independent Business Review" dated 10 November 1999 prepared by the Company's financial advisers. It is a document which I believe analyses the financial position of the Company. All that I need to say about this report for today's purposes is that it was provided to the Petitioner and the Petitioner does not find the recommendations made in that report acceptable. 4. No restructuring proposal as such has been put before the court. The affirmation filed on behalf of the Company asserts that there are five other banks which together hold $252 million out of a total indebtedness of $299 million, with whom the Company has been negotiating. The Petitioner was invited but declined to attend a meeting of creditor banks last Friday. 5. Throughout these adjournments, the Company has not seen fit to instruct solicitors which appears indefensible if the restructuring proposal is at all serious. I do not see how the Company itself could put forward the necessary documentation for a restructuring. Be that as it may, it is significant that none of the opposing creditors has appeared to oppose this petition. I am informed that solicitors for one of those creditors are present today, but as this is the hearing of the petition, they have no right of audience. Certainly, no affidavit has been filed by any of the opposing creditors to seek any adjournment or to oppose the petition on any ground. The situation is that after a six-week adjournment, there is no evidence before the court of any restructuring proposal. To what extent the financial review or report can form the basis of any restructuring, I do not know. According to the evidence of the Company, it ceased trading operations last December and as from April of this year, it has been negotiating, one way or another, with its creditors. Mr Cheng on behalf of the Company asked the Petitioner to withdraw this petition. That the Petitioner is not willing to do. In the alternative, Mr Cheng asked for an adjournment of an unspecified length of time to enable the Company to continue further discussions. 6. The financial report contains certain recommendations concerning the Company's assets which are situated in China. I do not need to go into those matters. But insofar as liquidation is concerned, it had this to say : a standard liquidation of the Company is likely to result in a return of 3.8 cents in the dollar. Part of this is dependent on Mr Cheng using his influence to enable certain assets to be collected, and if he does not do so, the amount to be collected would be substantially less. It then concluded with this observation : that "there are substantial risks in terms of time lost in proceeding with the restructuring". It went on to opine that
Given this scenario, it is for the Petitioner to make a commercial decision. 7. In the absence of any restructuring plan before the court and in the absence of any evidence from the creditors themselves that they support a particular plan, I see no basis for granting any adjournment. Accordingly, the application for an adjournment is dismissed. There is, therefore, only one order that the court can make and that is a compulsory winding-up order.
Representation: Mr C.W. Ling, inst'd by M/s Johnson, Stokes & Master, for the Petitioner Mr Cheng Yuk Ping (director) representing the Company, in person, present Mr J.Glen, for the Official Receiver |