Cresvale Far East Ltd v. The Registrar of Companies

HCMP 1871/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 1871 OF 2005

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BETWEEN

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Before: Hon Kwan J in Court

Date of Hearing: 28 September 2005

Date of Judgment: 28 September 2005

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J U D G M E N T

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1.This is a Notice of Originating Motion issued on 2 September 2005 by the liquidators of Cresvale Far East Limited (“CFE”), which has gone into voluntary liquidation.

2.CFE seeks an order under section 290(1) of the Companies Ordinance, Cap. 32 that the dissolution of Cresvale Finance Limited (“the Company”) be declared void with consequential directions on its reinstatement.

3.The Notice of Originating Motion was served on the Registrar of Companies who has indicated by letter that he will not oppose the orders sought and his costs have been agreed.

4.Immediately before the dissolution of the Company, CFE was the sole beneficial shareholder of the Company.  It is obviously an interested person for the purpose of section 290(1).

5.The Company was dissolved on 6 February 2005 under section 248(4) following the completion of a creditors’ voluntary winding up.  The liquidators of CFE were also the former liquidators of the Company.

6.Prior to dissolution, the Company was a member of a substantial worldwide group, the Princeton Economics International group of companies (“the PEI group”).  The Company, with several individuals, has been the subject of an international criminal investigation and prosecution in relation to the fraudulent issue of notes to investors.

7.Liquidators and/or receivers have been appointed in various jurisdictions to the majority of entities in the PEI group, including the Company.  These various liquidators and receivers are attempting to work together to reach a global settlement for creditors of the PEI group worldwide, which will result in all creditors, except HSBC USA Inc. which will subordinate claims it has assumed from the noteholders, receiving 100% of their claim.

8.Since the Company was dissolved, the former liquidators have become aware of an important document which the Company is required to execute to progress the global settlement strategy.  This is the Subordination Agreement.  It will provide that HSBC is to waive, with certain exceptions, all of the claims against certain members of the PEI group. The signing of the Subordination Agreement is a condition precedent to the closing of the settlement.  Attempts to amend the Subordination Agreement so that the Company is not to be a party to it have not been successful.  The Subordination Agreement must be signed before 22 November 2005.

9.CFE seeks to declare void the dissolution of the Company so that it can execute the Subordination Agreement.  It is appropriate that the Company should be reinstated, as it is to the benefit of all concerned.  The result of this is that the creditors’ voluntary liquidation of the Company will continue.  It is proposed that the appointment of the former liquidators of the Company should also continue.

10.I make an order in terms of paragraphs 1 to 6 of the Notice of Originating Motion.  I make an order that the costs of the Registrar of Companies in this application are to be paid by CFE in the agreed sum of HK$5,000.00 within 3 days of this order.

11.I also order that the former liquidators be appointed joint and several liquidators of the Company under section 252(1).

Mr Bernard Man, instructed by Messrs Allen & Overy, for the Applicant

The Respondent, absent