Company law — winding-up — permanent stay — debts of original creditors settled by third parties — stay appropriate where criteria in Re Outboard Marine Corp Asia Ltd met and undertakings given by third parties not to enforce claims for relevant sums
[2017] HKEC 2545
Court of First Instance
Companies Winding-up Proceedings No 20 of 2014
Harris J
8 September 2017

A contributory of C, a company in liquidation, sought a stay of the winding-up and the discharge of the Official Receiver as provisional liquidator on the ground that its principal asset held by a subsidiary, S, was sufficiently valuable that, if C’s debts could be adequately addressed, C should be revived to operate that asset through S. The Official Receiver confirmed that there was no reason to decline the application; and the Court ordered her fees to be paid out of assets realised during the liquidation. None of C’s creditors opposed the application. Inter alia, the debts due by C to the petitioner, P, and a solicitors’ firm (JD), had been settled by third parties (TPs); and it was proposed that TPs give undertakings that, insofar as they had stepped into the shoes of P and JD respectively and become creditors of C, they would not enforce their claims for the relevant sums.

Held, that the criteria identified in Re Outboard Marine Corp Asia Ltd having been satisfied, if the Court was provided with the undertakings referred to, this was now an appropriate case in which to order a stay (Re Outboard Marine Corp Asia Ltd [2003] 1 HKLRD 585 applied). (See paras. 2, 6, 8–9.)

Application

This was an application by a contributory of a company in liquidation for a stay of the winding-up and the discharge of the Official Receiver as provisional liquidator. The facts are set out in the judgment.

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