Harneys was instructed by Z-Obee Holdings Limited (Company) and its Hong Kong-appointed Joint Provisional Liquidators, to assist in their continued efforts to restructure Hong Kong-based electronics manufacturer Max Sunny and its Bermudian parent Z-Obee Holdings in relation to the non-payment of US$78 million in outstanding facilities.
In April 2014, Australia and New Zealand Banking Group (ANZ) filed winding-up petitions before the High Court of Hong Kong SAR however after almost 3 years, attempts to restructure Z-Obee’s debt under the laws of Hong Kong had failed due to there being, in part, no continued risk of dissipation of the assets of the Company and therefore concern as to whether the Hong Kong Courts could allow a restructuring of the Company under the principle set out in the Hong Kong Court of Appeal decision in Re Legend International.
Harneys, working exclusively with its Bermudian affiliate Zuill & Co to advise on and act in Bermuda law matters, advised the Company on its application for the appointment of the Joint Provisional Liquidators in Bermuda, as the Company’s place of incorporation. Such an application had the benefit of allowing the Company to avail itself of Bermuda’s more flexible restructuring regime to avoid its proposed cross-border restructuring being derailed by Hong Kong’s lack of modern restructuring law. The strategy was successful and on 17 February 2017 Chief Justice Ian Kawaley in the Supreme Court of Bermuda approved the appointment of Victor Yat Kit Jong, Man Chun So and Donald Osborne of PwC as the Joint Provisional Liquidators of Z-Obee Holdings Limited. The Hong Kong Joint Provisional Liquidators have seen since been discharged from office and the Bermuda Joint Provisional Liquidators’ appointment recognised by the Hong Kong High Court with a view to assisting with the implementation of the cross-border restructuring.
The approach taken in this case was novel and unprecedented and resulted in the reported decision: In re Z-Obee Holdings Limited  SC (Bda) 16. This was also the first known Bermuda case to explore the possible application of the new Judicial Insolvency Network’s Guidelines for Communication and Cooperation between Courts in Cross-Border Insolvency Matters. The project was shortlisted for Global Restructuring Review’s Cross-border Cooperation Award in 2017.
Ian Mann, Partner, head of Harneys' Litigation and Restructuring practice in Asia, Chai Ridgers,Partner, Harneys Hong Kong, and Jayson Wood, Head of Litigation, Zuill & Co, and Lilla Zuill, Managing Partner, Zuill & Co, advised. Mayer Brown and JSM advised on Hong Kong law.