Walkers acted for the sole participating shareholder (the
"Shareholder") of Asia Private Credit
Fund Limited (in Voluntary Liquidation) (the
"Fund") and sought orders that the
voluntary liquidation of the Fund continue under the supervision of
the Court pursuant to section 131 of the Companies Law (2018
Revision) (the "Companies Law") and that
the Shareholder's nominated liquidators, FTI Consulting, be
appointed as the joint official liquidators of the Fund. The
Shareholder principally advanced the argument that a
Court-supervised liquidation would facilitate a more effective,
economic or expeditious liquidation of the Fund in the interests of
the sole contributory and would allow the official liquidators to
conduct a comprehensive and independent investigation into the
affairs of the Fund. The manager of the fund (the
"Manager") opposed the application on
the grounds that the Shareholder had failed to meet the test in
section 131 of the Companies Law and the incumbent voluntary
liquidators, BDO, were already in office and they did not consider
it necessary at that point in time to bring the liquidation under
the supervision of the Court.
McMillan J heard the application on 27 February 2019 and immediately indicated that he was minded to make a supervision order as it was clear that there had been a deterioration of the relationship between the Manager and the Shareholder and that there were serious matters to be investigated in an official liquidation. However, on the question of the identity of the official liquidators, McMillan J indicated that he considered that the appropriate solution would be a supervision order combined with a joint appointment of FTI and BDO. It was submitted on behalf of the Shareholder that there were a number of unintended consequences that would arise from a joint appointment and that the views of the only economically enfranchised stakeholder should be of paramount importance with respect to the identity of the official liquidators.
Notwithstanding the Shareholder's submissions on the unintended consequences of a joint appointment and the fact that wishes of the only economically enfranchised stakeholder should be respected, McMillan J ordered the joint appointment of FTI and BDO as the official liquidators of the Fund, with written reasons for his decision delivered on 19 March 2019. The approach taken by the Grand Court in this matter is a novel development and loosely follows a separate decision by McMillan J In the matter of Pacific Harbor Asia Fund I, Ltd (In Official Liquidation) where the Grand Court appointed joint official liquidators from different firms due to the differing opinions of various stakeholders as to the identity of the liquidators.
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