Re Tai Lin Radio Service Ltd

HCCW 498/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) NO. 498 OF 2008

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Before: Hon Kwan J in Court

Date of Hearing: 2 March 2009

Date of Judgment: 2 March 2009

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J U D G M E N T

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1.This is a petition presented by Tai Lin Radio Service Limited (“the Company”) for its own winding up on the ground that it is insolvent and unable to pay its debts, and that it would be just and equitable for it to be wound up.  The petition was presented on 17 October 2008 and on the same day provisional liquidators were appointed.

2.According to the management accounts as at 17 October 2008, total assets of the Company were $45 million and total liabilities were $184 million, resulting in a net liabilities position of $139 million.

3.According to the statement of affairs dated 23 December 2008 submitted by the directors, as at 17 October 2008, the Company had an estimated deficiency of $164 million.

4.After provisional liquidators were appointed, they had made substantial efforts to locate interested buyers in the market to purchase the business or assets of the Company.  The offers received were such that the provisional liquidators took the view that a clearance sale of stock would generate a higher recovery for the creditors.  An order was made by the court in November 2008 for a clearance sale of the remaining stock of the Company and that took place in mid November.  The total sales proceeds from the clearance sale amounted to $5.3 million.  As preferential claims came up to $5.3 million, the provisional liquidators are of the view that it is unlikely there would be distribution to unsecured creditors.

5.The petition first came before the court in January 2009.  It was adjourned for two months to enable the Company to make further attempts to find an interested investor so that the debts and liabilities of the Company may be restructured and that it may continue as a going concern.  Such efforts have not been successful.  At the hearing today, the Company seeks a winding-up order. 

6.Accordingly, I make an order to wind up the Company.  The Company’s costs in this petition will be paid out of its assets.

Mr Eugene Kwok, instructed by Messrs Baker & McKenzie, for the Petitioner

Messrs Tsang, Chan & Wong, for the Joint & Several Provisional Liquidators of the Company, attendance excused

Mr Harry Lo, for the Official Receiver