COMPANY & INSOLVENCY – Court rules in favour of Receivers in multi-billion dollar Goldin Financial Case

The curtain has been brought down on the drama surrounding the ownership of Goldin Financial Global Centre. Emily Ting explains the background and significance of the Court’s decision.

On 29 October 2020, the Hon. Madam Justice Linda Chan of the Hong Kong Court of First Instance ordered that Smart Edge Limited and its principal asset, the Goldin Financial Global Centre, a 28-storey Grade A office tower located in Kowloon East, would remain under the control of the Joint Receivers and Managers of Smart Edge, and that the former directors of Smart Edge must proactively assist the Receivers in the performance of their duties. DCC’s James Wood acted for the Receivers.

Smart Edge, an indirect subsidiary of Goldin Financial Holdings Limited, a Bermuda incorporated HKSE listed company, is the issuer of floating rate senior secured notes in the aggregate principal amount of HK$6.8 billion and the borrower under other facilities, mezzanine loan facility.

Following, the occurrence of events of default under the Senior Notes, Mr Cosimo Borrelli and Mr Ma Siu Ming Simon, both of Borrelli Walsh Limited, were appointed on 13 July 2020 out of court as the Receivers. The Receivers were also appointed at the same time as the directors of Smart Edge, together with Ms Chi Lai Man Jocelyn, in place of the former directors.

The former directors of Smart Edge commenced proceedings on the following day in the High Court to challenge the validity of the appointment of the Receivers. In response, Smart Edge (acting at the direction of its Receivers) issued its own proceedings in the High Court against the former directors to prevent them from interfering with the work of the Receivers. The Receivers also sought directions under s.298A of the Companies (Winding-up & Miscellaneous Proceedings) Ordinance from the High Court on 25 September 2020 to confirm their powers.

The Hon. Madam Justice Linda Chan’s orders of 29 October 2020 brings to an end the drama surrounding the ownership and sale of the Goldin Financial Global Centre and allows the Receivers to proceed with sale of the building without further interference. The Court’s orders are important because they confirm the sanctity of out of court appointments of receivers and uphold the rights of secured creditors, which are fundamental to Hong Kong’s standing as an international financial centre.

The case has been widely reported in the press, including in the SCMP, Ming Pao, Hong Kong Economic Journal, Hong Kong Economic Times, Debtwire, Reorg, and REDD.

James Wood acted for Smart Edge and the Receivers, instructed by Ropes & Gray and led by Mr Charles Manzoni SC.

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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.

Emily Ting Emily was called to the Bar in 2019 and joined Chambers in September 2020. During her legal studies, she earned the Hong Kong Bar Association Prize for Trial Advocacy and the Jarvis & Kensington Prize for Trial Advocacy. Before joining Chambers, Emily was a Judicial Assistant at the Court of Final Appeal between 2019 and 2020, where she assisted judges in appeals, leave applications and other research and publications. Emily is developing a broad civil and criminal practice and accepts instructions in all areas of Chambers’ work.

 

Disclaimer: This article does not constitute legal advice and seeks to set out the general principles of the law. Detailed advice should therefore be sought from a legal professional relating to the individual merits and facts of a particular case.