Home > Profile > Our News > 18 Jan 2022

We successfully obtained sanction by the High Court of Hong Kong to commence a scheme of arrangements for a leading international fashion group, following the appointment of provisional liquidators in April 2020.


Following the appointment, our legal support enabled timely rescue of millions EURO worth of inventories in jeopardy. We lined up with legal, accounting and tax experts in UK, Germany, Austria and Hong Kong in preserving assets, looking after contentious matters and tax-sensitive portfolio, shielding the company against wrongful interferences. We proudly witnessed the Company walking out from the state of insolvency, through a steady improvement of retail performance in Europe amidst several rounds of lockdown in Germany.


This year, we assisted the provisional liquidators in exercising Court-conferred restructuring powers. We advised on the implementation of new corporate structures and business models for cost-efficacy and risk-management. We engaged with stakeholders including banks, Government bodies, Asia-Pacific suppliers, warehouses, employees, etc., and actively linked with potential investors and firmed up commercial terms to effect a promising financial boost for debt restructuring purposes.


These collective efforts bear fruit in our recent 3-step success in obtaining (i) leave of the High Court allowing the company to convene a creditor’s meeting to approve a scheme of arrangement ("Scheme”); (ii) unanimous approval of the Scheme by those attending the creditor’s meeting; and (iii) sanction of the High Court allowing the company to implement the Scheme pursuant to Sections 670, 671 673 and 674 of the Companies Ordinance (Cap. 622) with written decision published.


In sanctioning the Scheme, the Court was satisfied that (i) the Scheme is for a permissible purpose; (ii) creditors who were called on to vote as a single class had sufficiently similar legal rights such that they could consult together with a view to their common interest at a single meeting; (iii) the meeting was duly convened in accordance with the Court’s directions; (iv) creditors have been given sufficient information about the Scheme to enable them to make an informed decision; (v) the necessary statutory majorities have been obtained; (vi) an intelligent and honest man acting in accordance with his interests as a member of the class might reasonably approve the Scheme; and (vii) there is sufficient connection between the Scheme and Hong Kong.


We are glad that our joint force with the Provisional Liquidators team in producing the 161 pages of scheme documents was welcomed by the Court. It proves once again that commercially-sensible advice and practical solutions from legal professionals play an integral role in turning a corporate crisis into opportunities, especially in a fragile global economy like the present.


Our team, led by Litigation Partner Mr. Roy Leung and assisted by Associate Solicitor Mr. Mathew Liu, Ms. Theresa Law and Ms. Winnie Hui, will continue to provide comprehensive advice and reliable support to insolvency and restructuring professionals in Hong Kong and worldwide.