RE LUEN FAI PIECEGOODS & CLOTHS CO LTD

   HCCW541/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) NO. 541 OF 2009

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DECISION

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1.  This petition was presented by Yagi & Company (Hong Kong) Limited on 18 September 2009 seeking a winding up of the company on the grounds of insolvency. The Petitioner relies on an undisputed debt of HK$6,415,103.39, which has been due since August 2009.

2.  At the first hearing of the petition on 2 December 2009 the company did not appear. An opposing creditor, Itochu Textile Materials (Asia) Limited, did appear and opposed the petition. The petition came before a Master again on 9 December 2009. This time the company appeared by its general manager, a Mr Wu, but had not filed any evidence.

3.  On 14 December 2009 Madam Kwan, JA heard the petition. Again, no evidence had been filed. The petition was adjourned until 18 January 2010 for a scheme of arrangement to be proposed.

4.  On 18 January 2010 neither the company nor Itochu appeared. The petition was adjourned until 3 pm that day. Both the company and the opposing creditor then appeared and the petition was again adjourned, this time until 1 February 2010, and the company and Itochu were given leave to file evidence by 27 January 2010.

5.  On 27 January 2010 the company filed an affidavit by Tam Oi Chung, Lydia. Ms Tam exhibited letters from some trade creditors indicating that they did not wish the company to be wound up. There is, however, no evidence of what scheme of arrangement is proposed nor evidence that a majority in number or 75 per cent in value of its unsecured creditors support even an outline scheme.

6.  The court has not been told anything about the company’s cash-flow position or its balance sheets. The court has not been provided even with the most recent audited financial statement of the company.

7.  The company has not taken the opportunity given to it to put before the court evidence of a viable scheme of arrangement. It seems to me inherently unlikely, given the history of this case, that the company has the sophistication or the resources to do so.

8.  I make the normal winding-up order.

(Submissions by Plaintiff’s counsel for costs )

9.  I will give the Petitioner 50 per cent of the costs since 9 December 2009.