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Harneys advises on the restructuring of Z-Obee Holdings Limited

In our articles of March and May 2017, Harneys reported on the groundbreaking appointment of provisional liquidators and use of parallel schemes of arrangement under the laws of Bermuda and Hong Kong, to effect a restructuring plan of the Bermuda-incorporated, Hong Kong-listed company, Z-Obee Holdings Limited.

This is considered a pioneering development in the area of common law recognition and cross-border restructuring.

By way of update, on 15 August 2017, the Honourable Mr Justice Harris of the High Court of Hong Kong in Re Z-Obee Holdings Limited HCMP 1563/2017 and the Honourable Chief Justice Kawaley of the Supreme Court of Bermuda in In the Matter of Z-Obee Holdings Limited 2017: No.35, both granted respective orders for Z-Obee to convene scheme meetings of unsecured creditors for the purpose of voting on a parallel schemes of arrangement compromising Z-Obee’s debt. As at 31 October 2017, orders have now been granted in Hong Kong and in Bermuda sanctioning the parallel schemes of arrangement.

In approving the respective schemes, Chief Justice Kawaley echoed the decision of Justice Harris delivered earlier that day by saying “The essence of the commercial bargain is that a white knight investor is injecting money into the company to pay creditors who end up with a return between 16 percent, at the low end, and 40 percent, at the high end, where in a liquidation scenario, creditors would end up with zero, as you put it, Mr Wood [Counsel for Z-Obee], something is better than nothing. It is unsurprising that Mr [Justice] Harris [of the High Court of Hong Kong] earlier today Hong Kong time approved the Scheme, applying the same test, namely that an honest man of business might reasonably approve it."


Bermuda law advice is provided through Zuill & Co., an independent Bermudian law firm in exclusive association with Harneys.

Restructuring

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