News
Publications //
Submitted by // K Bowers, Partner/Solicitor Advocate; M Withington, Partner
04 May 2017

 

ILO Boosting Hong Kong's insurance sector

Click here to see the International Law Office Article

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News //
Submitted by // H Rogers, COO
02 May 2017


HWB is delighted to announce that Karen Lam will become a partner of the firm with effect from 1 May 2017.

Karen joined HWB in 2012.  Her practice focuses on family law matters with an emphasis on matrimonial disputes including divorce and separation, child custody, wardship and financial applications, third party interests, injunctions and settlements.  Karen's other areas of focus are will drafting, probate and general civil litigation matters.  Karen has litigation experience in the Court of Appeal, High Court, District Court and Family Court in Hong Kong.

Karen is a member of the Family Law Committee of the Law Society of Hong Kong and the Executive Committee of the Hong Kong Family Law Association.  Karen was involved in the establishment of and is a member of the Executive Committee of the Hong Kong Collaborative Practice Group.   Karen is also an Accredited Mediator on the Hong Kong International Arbitration Centre's (HKIAC) Panel of General Mediators and is a Civil Celebrant of Marriages in Hong Kong.  Karen is fluent in English, Cantonese and Mandarin.

Linda Heathfield, the partner in charge of HWB's family and matrimonial practice commented "I have worked with Karen for many years and I am delighted to promote her to partnership.  Karen is an experienced and capable family lawyer.  She will be an excellent addition to the HWB partnership."

Karen's promotion brings the total number of HWB partners to 24.  HWB's current headcount is approximately 170.

 


Karen Lam
 
T +852 2803 3639
F +852 2803 3680


About Us

Howse Williams Bowers is an independent law firm which combines the in-depth experience of its lawyers with a forward thinking approach.

Our key practice areas are corporate/commercial and corporate finance; commercial and maritime dispute resolution; clinical negligence and healthcare; insurance, personal injury and professional indemnity insurance; employment; family and matrimonial; property and building management; intellectual property and financial services/corporate regulatory and compliance.

As an independent law firm we are able to minimise legal and commercial conflicts of interest and act for clients in every industry sector. The partners have spent the majority of their careers in Hong Kong and have a detailed understanding of international business and business in Asia.

Disclaimer: The information contained in this article is intended to be a general guide only and is not intended to provide legal advice.  Please contact pr@hwbhk.com if you have any questions about the article.

 

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News //
Submitted by // H Rogers, COO
02 May 2017


HWB is delighted to announce that Karen Lam will become a partner of the firm with effect from 1 May 2017.

Karen joined HWB in 2012.  Her practice focuses on family law matters with an emphasis on matrimonial disputes including divorce and separation, child custody, wardship and financial applications, third party interests, injunctions and settlements.  Karen's other areas of focus are will drafting, probate and general civil litigation matters.  Karen has litigation experience in the Court of Appeal, High Court, District Court and Family Court in Hong Kong.

Karen is a member of the Family Law Committee of the Law Society of Hong Kong and the Executive Committee of the Hong Kong Family Law Association.  Karen was involved in the establishment of and is a member of the Executive Committee of the Hong Kong Collaborative Practice Group.   Karen is also an Accredited Mediator on the Hong Kong International Arbitration Centre's (HKIAC) Panel of General Mediators and is a Civil Celebrant of Marriages in Hong Kong.  Karen is fluent in English, Cantonese and Mandarin.

Linda Heathfield, the partner in charge of HWB's family and matrimonial practice commented "I have worked with Karen for many years and I am delighted to promote her to partnership.  Karen is an experienced and capable family lawyer.  She will be an excellent addition to the HWB partnership."

Karen's promotion brings the total number of HWB partners to 24.  HWB's current headcount is approximately 170.

 


Karen Lam
 
T +852 2803 3639
F +852 2803 3680
E karensy.lam@hwbhk.com


About Us

Howse Williams Bowers is an independent law firm which combines the in-depth experience of its lawyers with a forward thinking approach.

Our key practice areas are corporate/commercial and corporate finance; commercial and maritime dispute resolution; clinical negligence and healthcare; insurance, personal injury and professional indemnity insurance; employment; family and matrimonial; property and building management; intellectual property and financial services/corporate regulatory and compliance.

As an independent law firm we are able to minimise legal and commercial conflicts of interest and act for clients in every industry sector. The partners have spent the majority of their careers in Hong Kong and have a detailed understanding of international business and business in Asia.

Disclaimer: The information contained in this article is intended to be a general guide only and is not intended to provide legal advice.  Please contact pr@hwbhk.com if you have any questions about the article.

 

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News //
Submitted by // K Bowers, Partner / Solicitor Advocate
28 April 2017


Can a company continue to conduct financial transactions in the face of winding-up proceedings by its shareholders? 

Background

In Harbour Front Ltd v Money Facts Ltd [2017] HKEC 249, Fonfair Company Limited ("Company") was the subject of an unfair prejudice petition. The Company has two shareholders, and each shareholder (both being companies) is owned respectively by two brothers. There is a long-running dispute between the brothers over the control and management of the Company, and in April 2015, one brother ("Petitioner") presented an unfair prejudice petition ("UPP") to the Hong Kong Court seeking relief from conduct by the Company which he alleged was prejudicial to his company's interests as a minority shareholder. The Hong Kong Courts have a wide discretion to award relief in the event of a successful unfair prejudice petition, with the usual remedy being a 'buy-out order' for one party to buy out the shares of the other. In this case however, the UPP was drafted to include a winding-up order as an alternative remedy. Consequently, the Company's assets were frozen (and could not be disposed of) pending the hearing of the Petitioner's application for the appointment of Receivers. It was in these circumstances that an application for a Validation Order was made to the Hong Kong Court ("Validation Order").

Validation Orders are sought where a company wishes to conduct financial transactions (e.g. access its bank account to pay employees) whilst its assets have been frozen as a result of winding-up proceedings. In this case, a Validation Order was sought to enable the Company to renew a recently-expired lease on a piece of Company-owned property ("Property"). The Petitioner objected to the application for a Validation Order primarily on the ground that the manner in which his brother had dealt with the expired lease was one of the matters giving rise to the UPP in the first place and that consequently, the application should not be granted until the issues underlying the UPP have been determined.

Solvent companies with ongoing businesses

In assessing an application for a Validation Order, the Hong Kong Court will first consider whether the company is solvent

It was held in Re Wah Yin Cheong Co Ltd [2003] HKEC 892 that the weight attached to the opposition to an application for a Validation Order is very different in circumstances where the company is solvent with ongoing business as compared to the situation where a winding-up petition is presented on the ground of insolvency. Where a company is solvent with valuable ongoing business, the directors should be allowed to continue to operate that business normally, and without close supervision by the Court.

In the present case, the Court was satisfied that the Company is an ongoing business that was solvent on both a net profit and cash-flow basis.

The Hong Kong Court will also consider the nature of the company's ongoing businesses

An exception to the general rule on non-interference with the discretion of directors may exist where there is an underlying dispute between the shareholders that goes to whether or not a company should continue in its current form, and where it is possible that the value of the company's assets will be depleted if it is permitted to continue trading. To determine whether a particular case falls within the ambit of this exception, the Hong Kong Court will identify the precise nature of the Validation Order that it is being invited to make.

In the present case, the Court found that it would be artificial to view the proposed transaction as "anything other than a straightforward commercial decision to continue with an existing commercial arrangement" in view of the fact that the Company's "sole activity is holding the Property for profit", and given that there is "no suggestion that the rent is materially out of line with the market rent". Therefore, the Court saw no reason to refuse the Validation Order on the ground that the Petitioner was concerned about purported connections between his brother and the prospective tenant of the Property.

Opposing an application for a Validation Order

As held by the Hong Kong Court in this case, "an application for a validation order is not an opportunity [for shareholders] to argue about the wisdom of a proposed transaction [by the Company]". The Hong Kong Court is generally unlikely to refuse to make a Validation Order in respect of a solvent company with valuable ongoing business, because the responsibility of managing the business of a company is entrusted by the company's articles of association to its directors. However, this is not a hard and fast rule in circumstances where the Hong Kong Court will also take into consideration exceptional circumstances and factors such as whether the proposed transaction falls clearly outside the company's ordinary course of business, and whether there is proven bad faith.


About Us

Howse Williams Bowers is an independent law firm which combines the in-depth experience of its lawyers with a forward thinking approach.

Our key practice areas are corporate/commercial and corporate finance; commercial and maritime dispute resolution; clinical negligence and healthcare; insurance, personal injury and professional indemnity insurance; employment; family and matrimonial; property and building management; banking; financial services/corporate regulatory and compliance.

As an independent law firm we are able to minimise legal and commercial conflicts of interest and act for clients in every industry sector. The partners have spent the majority of their careers in Hong Kong and have a detailed understanding of international business and business in Asia.

Disclaimer: The information contained in this article is intended to be a general guide only and is not intended to provide legal advice.  Please contact pr@hwbhk.com if you have any questions about the article.

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