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In recent years, there has been an increasing trend for different creditors to issue multiple petitions against the same debtor company. This may be due to the large number of listed companies in Hong Kong encountering financial difficulties during this period of economic downturn, or simply a lack of knowledge of the law in this area.
In Re China Greenfresh Group Co Ltd ( HKCFI 36 and  HKCFI 1257) and Re Grand Peace Group Holdings Limited ( HKCFI 1142), the Court expressed its dissatisfaction in relation to this practice, and explained the Court’s approach to dealing with subsequent petitions issued against the same debtor company.
Re China Greenfresh Group Co Ltd ( HKCFI 36 and  HKCFI 1257)
In Re China Greenfresh Group Co Ltd, the company is listed on the Main Board of the Hong Kong Stock Exchange. There were a total of 5 petitions issued against the company, with the 1st petition and the 5th petition both initially listed for trial in April 2021. The petition in question in the hearing was the 4th petition.
The Court noted the following relevant principles and practice to discourage creditors from issuing winding-up petitions when the debtor company is already subject to a winding-up petition:
Where there are multiple petitions, the conventional practice should be:
In light of the principles and practice mentioned above, the Court considered that with the 1st petition pending, the 4th petition was procedurally improper. The petitioner in the 4th petition could appear on the 1st petition as a supporting creditor and be substituted as the petitioner in the 1st petition if the petitioner in the 1st petition had been paid off or was otherwise unwilling to proceed with the 1st petition.
In relation to the appropriate approach to deal with subsequent petitions, the Court explained the difference between ordering dismissal and ordering removal of a petition from the Court file:
By its decision dated 29 April 2021, the Court made the following orders in respect of the 1st, 4th and 5th petitions:
Re Grand Peace Group Holdings Limited ( HKCFI 1142)
In Re Grand Peace Group Holdings Limited, notwithstanding the Court’s guidance with regard to cases involving multiple petitions, as laid down in Re China Greenfresh Group Co Ltd, the petitioner in the 2nd petition sought to justify the issue of the 2nd petition on the ground that there were the following exceptional circumstances:
The Court did not accept these as exceptional circumstances and considered that the proper course was to appear on the earlier petition as a supporting creditor and apply for substitution if necessary. Given that the petitioner which issued the 2nd petition was aware of the earlier petition, the Court ordered that the 2nd petition be dismissed with costs to be paid by the petitioner of the 2nd petition to the company.
The Court’s clear guidance reminds creditors and practitioners that before a creditor decides to issue a winding-up petition, they must conduct a search to ensure there is no pending petition against the subject company. Where a creditor knows of an extant petition against the same subject company, the appropriate approach is to appear on such petition as a supporting creditor and apply for substitution, if necessary. Creditors should be mindful of the potential adverse costs consequences if they nonetheless decide to issue a further winding-up petition against the same company.
 Paragraph 9.2 of the Practice Direction (Insolvency Proceedings)
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