On July 18, 2023, the Hong Kong Companies Court (the Court) struck out a winding-up petition (the Petition) on the grounds that the petitioner (the Petitioner), an investor of a publicly issued U.S.-dollar-denominated notes issued by a real estate company listed on the Hong Kong Stock Exchange(the Company) and held on a “global notes structure,” lacked standing to present the Petition. The core question in this case was whether the Petitioner qualified as a contingent creditor of the Company. The decision is significant and has far-reaching implications, as this is the first occasion a Hong Kong court has had to decide the issue of standing of an investor of a global note to present a winding-up petition as a contingent creditor.
Notably, the Court considered it necessary for there to be an existing legal relationship between the petitioner and the debtor before a petitioner could qualify as a contingent creditor. In the circumstances, there was no existing contractual relationship and obligation between the Petitioner and the Company prior to the issuance of definitive notes, which was a prerequisite to becoming a registered holder and therefore a creditor of the Company. Unless or until the Petitioner obtains definitive notes in its name, the Petitioner cannot establish that it is a creditor, either actual or contingent.
Detailed analysis to follow.
The Sidley team is led by Desmond Ang, Lester Fung, Tiffany Fung, and Edwin Leung (all Hong Kong). The Sidley team has been at the forefront in representing clients in high profile contentious insolvencies in this macro environment.
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Sidley Secures Victory Before the Hong Kong Companies Court in Striking Out a Winding-up Petition on the Grounds of Lack of Standing
July 21, 2023
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