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COMPANY & INSOLVENCY – James Wood acts for Freeman Fintech in HK$3billion scheme of arrangement

James Wood acted as Hong Kong counsel for Freeman FinTech Corporation Limited (the “Company”), acting by its joint provisional liquidators from Deloitte appointed by the Hong Kong Court (“JPLs”), in respect of its HK$3 billion scheme of arrangement (the “Hong Kong Scheme”).

The Hong Kong Scheme ran in parallel with an identical scheme of arrangement in the Cayman Islands (“Cayman Islands Scheme”).  The Hong Kong Scheme and Cayman Islands Scheme received court sanction in Hong Kong and the Cayman Islands on 5 and 6 February 2021 respectively.

The Company is an investment holding company whose subsidiaries principally provide financial services to customers in Hong Kong and the People’s Republic of China. The Company’s shares are listed on the main board of the Hong Kong Stock Exchange.

The JPLs’ ability to promote the Hong Kong Scheme and Cayman Islands Scheme was contingent upon them first being recognised by the Grand Court as foreign appointees over a Cayman Islands company and without insolvency proceedings needing to be commenced in the Cayman Islands. That recognition was granted in November 2020 by the Hon. Segal J following the issue of a Letter of Request by the Hon. Linda Chan J in Hong Kong.  The use of a Letter of Request and recognition of the JPLs in the Cayman Islands was similar to the structure first employed by Deloitte and James and his colleagues in FU JI Food and Catering Services Holdings Ltd (FSD  222 of 2010).

Applications to both the Hong Kong Court and the Grand Court were subsequently made in respect of the Hong Kong Scheme and Cayman Islands Scheme, with both the Hong Kong Court and Grand Court coordinating the directions given in regard to the respective schemes so as to ensure the required meetings of creditors took place concurrently, and at the same venue, and that the sanction hearings by which the schemes received formal sanction occurred on consecutive days in Hong Kong and in the Cayman Islands.  The JPLs and their Hong Kong legal team were able to attend the hearings in the Grand Court by way of Zoom call and the Hong Kong and Cayman Islands Schemes were closely coordinated between the two courts.

The case provides a good example of cross-border cooperation at work between the courts of Hong Kong and the Cayman Islands. While each scheme stood on its own feet, by working collaboratively the courts, the legal teams, and the JPLs’ team at Deloitte, were able to ensure similar approaches were adopted to common issues mitigating the risk of any inconsistencies and, ultimately, ensuring that the schemes each received final sanction expeditiously.

A copy of the Harris J’s recent judgment can be found here.

James Wood was instructed by Simon Tang, Karen Luk and Brian Chan of P.C. Woo & Co

Campbells Shaun Folpp and Jane Hale in Hong Kong and Guy Manning in the Cayman Islands – acted as Cayman counsel to the Company

James Wood

James is an experienced litigator who is particularly recognised for his strengths in insolvency matters. His cases are often substantial and multi-jurisdictional in nature, involving legal proceedings in forums around the world, including in Australia, Bermuda, the British Virgin Islands, Canada, the Cayman Islands, the Channel Islands, England, Indonesia, Mauritius, the PRC, Singapore, Switzerland, and the United States. James has been recommended in both Chambers and Partners and Legal 500.