RE CHAN HO WAI

HCB 12944/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

BANKRUPTCY PROCEEDINGS NO. 12944 OF 2001

____________

_______________

J U D G M E N T

_______________

1. The debtor, Mr Chan Ho Wai, filed a petition for his own bankruptcy on 27 December 2001. His petition is opposed by two unsecured creditors representing Paniv Diam and Diasun Exports.

2. According to the statement of affairs filed by the debtor，he has carried on business in the name of Eko Jewellery Design Company ("Eko"). He is also the shareholder and director of a limited company known as Neko Trading Co. Ltd ("Neko"). He admitted he has 13 unsecured creditors to whom he owed money on a personal basis and his total liabilities amounted to over HK$1 million. Apart from that, there are 27 unsecured creditors of Eko and the total indebtedness owed to the trade creditors is over HK$4.9 million. The four personal bank accounts of the debtor are in debit. Eko holds six bank accounts with a total net credit balance of a little over HK$4,000.00. The debtor has also exhibited the financial statements of Eko and Neko for the year ended 31 December 2000. According to these financial statements, Eko had net liabilities of over HK$500,000.00 and the limited company had a deficit in capital of over HK$100,000.00.

3. On the basis of the statement of affairs, I am satisfied that the debtor is unable to pay his debts. The two opposing creditors do not have any or any detailed knowledge of the financial position of the debtor, they believe that the debtor should have cash receipts as a result of the goods he had sold.

4. I have explained the position to the opposing creditors, whether the debtor had received cash as a result of his trading would be a matter to be looked into by the Official Receiver once a bankruptcy order is made.

5. Further, the debtor would be obliged to provide to the Official Receiver his trade accounts and ledgers and all bank statements regarding the business he had conducted. If the debtor had received cash as a result of goods sold, the cash would form part of his assets to be distributed to the unsecured debtors. If there are debts owing to the debtor as a result of the trading he had carried on, the Official Receiver would demand payment from these debtors and any further cash received by the Official Receiver would also form part of the assets of the debtor to be distributed to all unsecured creditors on an equal basis. Thus, the position of all the unsecured creditors of the debtor would be fully protected at law.

6. For the above reasons, and as I am satisfied that the debtor does not have any or any sufficient assets to pay all his debts, I make a bankruptcy order against him.