Ashurst advises noteholders on strategic enforcement and winding up in relation to Haimen Zhongnan's defaulted notes
17 August 2023
17 August 2023
Global law firm Ashurst has advised a group of holders of the notes issued by Haimen Zhongnan Investment Development (International) Co Ltd on their enforcement strategies after defaults on the notes have occurred. One of the strategic steps included commencing winding up proceeding against the issuer in the British Virgin Islands ("BVI") without instructing the notes trustee. The BVI Commercial Court granted the order sought for to appoint liquidators to the issuer, and the BVI Court of Appeal refused an application to stay the appointment of liquidators.
The BVI Commercial Court's decision is significant because the court recognised that an ultimate beneficial interest owner of notes held through clearing systems can be "creditors" under the BVI Insolvency Act and can have the standing to petition for the winding up of the issuer. In doing so, the court considered the specific steps taken by the petitioning holder, the circumstances of the case and various legal authorities in England and Wales, Hong Kong, Bermuda and the Cayman Islands, and decided to follow the broader approach applied by the UK Supreme Court in Re Nortel Companies  UKSC 52 instead.
The Ashurst team is led by Hong Kong restructuring and special situations partner Lance Jiang, who is assisted by associate Lawrence Li and trainee Ivana Gu. The team collaborated with Mourant and Peter Burgess of South Square as advisers to the petitioning holder on BVI law.
Ashurst regularly advises creditors on debt restructuring and special situations and provides innovative solutions to clients.