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On October 23, 2024, Deputy High Court Judge Le Pichon of the High Court of the Hong Kong Special Administrative Region granted recognition and support to Chan Ho Yin (Michael Chan) and Elaine Hanrahan, the joint official liquidators of Bull’s-Eye Limited. This decision followed a request from the Eastern Caribbean Supreme Court in the British Virgin Islands (BVI). The ruling clarifies the Hong Kong Court's stance on recognizing foreign liquidators appointed in a company's place of incorporation, particularly when the company's main interests are located in Hong Kong.
Background on Bull’s-Eye Limited
Bull’s-Eye is a company registered in the BVI and holds a significant stake (29.77%) in Hua Han Health Industry Holdings Limited, a Cayman Islands entity that was previously listed on the Hong Kong Stock Exchange. In July 2019, Hua Han entered provisional liquidation under an order from the Hong Kong Court, which was followed by a winding-up order in December 2019.
In August 2022, the Hong Kong Court ordered Bull’s-Eye to pay HK$713 million to Hua Han and its subsidiaries for misappropriated funds knowingly received by Bull’s-Eye.
Winding-up Proceedings and Restoration Efforts
During recovery efforts, it was revealed that Bull’s-Eye had been dissolved. Consequently, on August 23, 2023, the joint liquidators of Intended Features Limited (in Official Liquidation) sought assistance to restore Bull’s-Eye to the Register of Companies, which was successfully achieved on September 1, 2023. Following this, an application was made to the BVI Court for the appointment of liquidators for Bull’s-Eye. On January 15, 2024, Mr. Chan and Ms. Hanrahan were appointed as joint official liquidators by the BVI Court.
Despite being incorporated in the BVI, Bull’s-Eye possesses valuable assets in Hong Kong, including cash in nine bank accounts with various financial institutions. These assets are currently subject to restrictive notices from the Hong Kong Securities and Futures Commission.
To facilitate access to these assets, Conyers, representing Mr. Chan and Ms. Hanrahan, applied to the BVI Court on July 24, 2024, for a letter of request directed at the High Court of Hong Kong for recognition and assistance. The BVI Court issued this request on July 26, 2024.
The Recognition Proceedings in Hong Kong
On September 30, 2024, the joint liquidators submitted their application to the Hong Kong Court for recognition of Bull’s-Eye's insolvent liquidation and their appointment by the BVI Court. Deputy High Court Judge Le Pichon presided over this application and established that recognition would be granted if:
The foreign insolvency proceedings were collective.
They were initiated in a jurisdiction where the company's center of main interests is located.
If these conditions were not met but the proceedings occurred in the jurisdiction of incorporation, recognition could still be granted for limited purposes related to managerial assistance or practical needs.Judge Le Pichon emphasized that as long as foreign orders do not adversely affect local interests, there should be a tendency towards recognition by the court.
The standard recognition order from the Hong Kong Court allows foreign liquidators to:
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Locate and secure all assets belonging to the company.\
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Initiate legal proceedings as necessary.
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Access information regarding the company.
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Manage bank accounts associated with the company.
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Engage professional advisors as needed.
The court concluded that recognizing the joint liquidators' status was essential for them to manage Bull’s-Eye's assets effectively within Hong Kong.
In her ruling, Judge Le Pichon expressed confidence that all criteria for recognition and assistance were met and therefore granted recognition to Mr. Chan and Ms. Hanrahan.This decision is expected to significantly benefit creditors of Bull’s-Eye and its subsidiaries by facilitating asset recovery efforts. It also highlights the importance of judicial cooperation between jurisdictions like the British Virgin Islands and Hong Kong.