Re Fun Fun World Investment Ltd.

HCCW 198/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES WINDING-UP NO. 198 OF 2002

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D E C I S I O N

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1. This is an application by Provisional Liquidators under Section 193 (3) and Section 199 of the Companies Ordinance for orders that the sale and transfer of the real and personal property and things in action of the company by way of tender or private contract, at the best prices reasonably obtainable by the Provisional Liquidators, to any person or company, in whole or in parcels, be sanctioned.

2. On 21 February 2002, Poon Dep. J. appointed the Provisional Liquidators with power, amongst other things, to enter into negotiations with any person or company for the purpose of selling the property and things in action of the company by way of tender or private contract, at the best prices reasonably obtainable by the Provisional Liquidators and, with the sanction of the court, to transfer the whole thereof to any person or company or to sell the same in parcels.

3. It is the Provisional Liquidators' application today to get the sanction of the court for the transfer by sale of the property and things in action of the company.

4. Basically, the Company was in the business of amusement arcades. Since the Provisional Liquidators were appointed, efforts had been made to attempt to interest third parties in the acquisition of the business as a going concern. Despite the Provisional Liquidators' efforts, it would appear that up to date, no offers have been received for the acquisition of the business as a going concern although that would have realised the greatest amount for the creditors and the Company.

5. Meanwhile, these machines have been occupying premises which have been leased by the Company from various landlords and these landlords have been demanding removal of these machines so that vacant possession could be delivered.

6. Tenders have been sought from various interested parties for the acquisition of the machines. In relation to the tenders received, the total of the best individual tenders is about $5 million and the best tender for the equipment at all twelve games centres is in the amount of about $3.6 million. These exceed the figure of $1 million odd which is the estimated realisation value on the sale of the Company' equipment which has been provided in a valuation report done by expert advisers retained by the Provisional Liquidators.

7. In the circumstances, given that it is necessary to vacate these premises where the machines are located and in order to maintain the interest of the tenderers, it appears to me that it would be appropriate for this court to give the relevant sanction sought which is in terms tracking the provisions of Section 199 (2)(a) of the Companies Ordinance.

8. Accordingly, I would grant an order in terms of paragraphs 1 and 2 of the summons filed on 11 April 2002.