Re Commodore International Ltd
| Jurisdiction | Bahamas |
| Judge | Osadebay, J. |
| Judgment Date | 06 July 1994 |
| Court | Supreme Court (Bahamas) |
| Docket Number | No. 581 of 1994 |
| Date | 06 July 1994 |
Supreme Court
Osadebay, A.g. J.
No. 581 of 1994
Emerick A. Knowles and Robert Van Wynen of counsel for the petitioner and for Sanpaolo Bank, Credit Lyonnais Belgium, Kredietbank, N.V., Banque Nationale de Paris, Massy and Midland Bank, P.L.C. supporting the petition, Michael L. Barnett of counsel for the Company, Michael C. E. Turner of counsel for Export Development Corporation supporting the petition, Colin E. Callender, Lester Mortimer and Carol Cartwright of counsel for the Prudential Insurance Company of America, Pruco Life Insurance Company and Anchor National Life Insurance Company opposing the Petition and Caryl Lashley and Yvette McCartney of counsel for Daewoo Telecom and Daewoo Corporation opposing the petition.
Company law - Compulsory winding up — Petition for the compulsory winding up of a Company by a creditor of the Company — Petition was presented on the ground that the Company was insolvent and unable to pay its debts — Company admitted it was insolvent and unable to pat its debts — Some creditors preferred that the winding up of the Company take place in New York — Judgment that the Bahamas was the natural and appropriate forum for the proceedings — Ordered that the Company be wound up by the Court under the Companies Act 1992 — Company was unable to pay its debts — Just and equitable the Company should be wound up.
Osadebay, J. (Acting): On the 24th June, 1994 I made an Order for the Winding up of the “‘Commodore International Limited, under the provisions of the Companies Act, 1992, and appointed Mr. Franklyn Wilson and Mr. McGregor Robertson to be joint Liquidators and that the costs of the petitioner and of the Company be taxed and paid out of the assets of the Company. I promised to give my reasons in writing. I now do so.
The matter before me is a petition for the compulsory winding up of a Company — Commodore International Limited — presented by Banque Nationale de Paris, a Creditor of the Company. The petition is presented on the ground that the Company is insolvent and unable to pay its debts. According to the petition, as the 25th April, 1994 the Company is indebted to Banque Nationale de Paris, the petitioner, in the sum of $1,514,915.15 and Hong Kong Dollars 611,465.74 (which I am informed amounts to about $80,000.00 in United States currency) for moneys loaned, Letters of Credit provided to the Company's subsidiary, Commodore Electronics Limited (now in Liquidation under and Order of the Supreme Court of The Bahamas made on the repayment of which the Company guaranteed.
The petitioner has caused to be served on the Company a statutory demand as required under the companies Act 1992 of The Bahamas calling on the Company to pay the said sums but the Company has been unable to pay or secure or compound the same. The petition further alleges that the Company In its financial statements show that the Company experienced a loss for the fiscal year ending 30th June, 1993, of U.S. $356,000.000.00 and its consolidated balance sheet showed a deficit of shareholders equity of U.S.$53,000,000.00, and the Company has continued to experience substantial losses even at this time. The Company has showed no signs of recovery or that it will be able to pay its debts. In the circumstances, the petition prays, it is just and equitable that the Company be wound up.
As will be seen later, I believe it is important at this stage for me to state that the winding up per se has not been opposed or objected to by any Creditor, all of whom agree that it is just and equitable that the Company be wound — up, except that some of the Creditors would prefer that the Winding — up of the Company take place in New York, United States of America.
The Company admits the evidence that it is insolvent and unable to pay its debts and therefore has not opposed the petition. Infact the Company supports the petition.
Commodore International Limited (C.I.L) is a Company incorporated and existing under the Laws of The Bahamas, with its Registered Office in the city of Nassau, New Providence, Bahamas, although, as stated by its President/Director in his affidavit evidence, its business and assets are scattered around the world.
Commodore Electronics Limited (C.E.L) is a subsidiary of C.I.L and is also a Company incorporated and existing under the laws of The Bahamas and has its Registered Office in Nassau, New Providence, Bahamas. C.I.L. is the parent of a multinational group of companies engaged in the manufacturing and selling computers in many parts of the world. By a Resolution of the Company passed on April, 29th, 1994, C.E.L. went into a Voluntary Winding — up (i.e. Voluntary Liquidation). On 2nd of May, 1994, C.E.L. filed a petition with the Supreme Court of the Bahamas requesting that the winding — up be continued under the supervision of the Court. This petition was heard on the 31st May, 1994, and C.E.L's liquidation was ordered to be continued under the supervision of the Supreme Court of The Bahamas. C.E.L therefore is presently in liquidation under the supervision of the Court.
Upon the filing and advertisement of the petition for the winding – up of C.I.L. the following gave notice of their intention to attend the hearing of the petition:–
| 1. Name of Creditor: Attorneys: Amount of Debt: Notice Given: 2. Name of Creditor: Attorneys: Amount of Debt: Notice Given: 3. Name of Creditor: Attorneys: Amount of Debt: Notice Given: 4. Name of Creditor: Attorneys: Amount of Debt: Notice Given: 5. Name of Creditor: Attorneys: Amount of Debt: Notice Given: 6. Name of Creditor: Attorneys: Amount of Debt: Notice Given 7. Name of Creditor: Attorneys: Amount of Debt: Notice Given: | SCI Systems, Inc. 2101 West Clinton Avenue, P. O. Box 1000, Huntsville, Alabama 35807, U.S.A Alexiou, Knowles & Co. P. O. Box N–4805, Nassau, Bahamas US$20,500,000.00 Supporting Sanpaolo Bank 245 Park Avenue, New York, New York 10167, U .S.A. Alexiou, Knowles & Co. P.O. Box N. 4805, Nassau, Bahamas US$3,358,748.78 plus accrued and unpaid interest Supporting Credit Lyonnais Belgium Maataschappelijke Zetel, Lange Gasthuisstraat 9, B–2000 Antwerp, Belgium Alexiou, Knowles & Co. P. O. Box N–4805, Nassau, Bahamas Bfrs. 29,998,687.00 plus accrued and unpaid interest from 1st April, 1994. Supporting Kreditbank, N.V. Warmeesburg 25–26, B–1000 Brussels, Belguim Alexiou, Knowles & Co. P. O. Box N–4805, Nassau, Bahamas Bfrs 28,936,101.00 plus accrued and unpaid interest from 1st April, 1994. Supporting Banque National de Paris, Massey 2,12 Chemin des Femmes, Paris France Alexiou, Knowles & Co. P. O. Box N–4805, Nassau, Bahamas FFR 4,420,189.79 plus accrued and unpaid interest from the 18th April, 1994. Supporting Midland Bank, PLC. Midland House, Queen's Court, 55/58 Queen's Road, Reading RGl 4DB, England Alexiou, Knowles & Co. P. O. N–4805, Nassau, Bahamas GBP 1,025,103.00 Supporting Export Development Corporation Ottawa, Canada McKinney, Turner & Co. P. O. Box N 8195, Nassau, Bahamas US$15,016,481.04 Supporting |
OPPOSING CREDITORS
| 8. Name of Creditor: Attorneys: Amount of Debt: Notice Given: 9. Name of Creditor: Attorneys: Amount of Debt: Notice Given: 10. Name of Creditor: Attorneys: Amount of Debt: Notice Given: 11. Name of Creditor: Attorneys: Amount of Debt: Notice Given: | The Prudential Insurance Company of America Four Gateway Center, Newark, New Jersey 01702–4069, U.S.A. Callendars & Co. P. O. Box N 7117, Nassau, Bahamas US $26,000,000.00 plus interest Opposing Pruce Life Insurance Company 213 Washington Street, Newark, New Jersey, 07102, U.S.A. Callenders & Co. P. O. Box N. 7117 Nassau, Bahamas US$2,000,000.00 plus interest Opposing Anchor National Life Insurance Company One Sun America Center, Century City, Los Angeles, California 90067, U.S.A. Callenders & Co. P. O. Box N. 7117, Nassau, Bahamas US$5,000,000.00 plus interest Opposing Daewoo Telecom & Daewoo Corporation Seoul, Korea Dupuch & Turnquest & Co. P. O. Box N. 8181, Nassau, Bahamas US$15,000,000.00 Opposing |
As seen from above, the petition is supported by one group of Creditors and opposed by another group of Creditors led by the prudential Insurance Company of America, whose address is in Newark, New Jersey, one of the United States of America. The evidence of the supporters of the petition is centered on the affidavit or declaration evidence of Mehdi R. Ali, the President and Director of C.I.L. and that of those who oppose the petition is centered on the Affidavit evidence of Joseph Y. Alouf, A Vice President of the Prudential Insurance Company of America at the Principal Office in Newark, New Jersey, United States of America.
Before dealing with the law on this matter I shall refer to the evidence in the various affidavits before me on which the parties rely either to support or oppose the petition for winding — up. In doing so I shall restrict myself to the paragraphs in such affidavits as I think relevant to the issue before me.
Firstly, Mr. Mehdi R. Ali by way of Declaration or Affidavit states as follows:
- I have been a Director of Commodore International Limited (C.I.L) a corporation existing under the laws of The Bahamas, since 1988, and President since 1989. I am also a Director of Commodore Electronics Limited (C.E.L.) also a Corporation existing under the Laws of The Bahamas and a subsidiary of C.I.L. I have personal knowledge of the facts contained in this declaration and with the business affairs and history of C.I.L. and its numerous direct and indirect subsidiaries (collectively, “Commodore”). 2. ……………………………….. 3. ……………………………….. 4. ……………………………….. 5. ……………………………….. 6. ……………………………….. 7. Because CIL and CEL are both incorporated in the Bahamas, because the overwhelming number of their creditors are located abroad, because over 90% of Commodore's sales are generated outside of the...
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