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China Fishery Group Trustee Sought

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CooperatieveRabobank, Standard Chartered Bank (Hong Kong), China CITIC Bank International and DBS Bank (Hong Kong) (collectively, the “Club Lender Parties”) filed with the U.S. Bankruptcy Court a motion for the entry of an order directing the appointment of a Chapter 11 trustee for China the Fishery Group case.

The motion explains, “This Motion seeks appointment of a Chapter 11 trustee because it is in the interests of the creditors and other interests of the estate; a natural remedy in a climate where the Debtors and their affiliates cannot publish audited accounts (for over a year) due to a pending forensic accounting investigation and commenced these and three other global insolvency proceedings for the express purpose of stopping a sale that had been ongoing in an effort to repay defaulted debt in excess of $700 million….A Chapter 11 trustee is appropriate in these cases because, among other reasons: The Debtors’ creditors lack confidence in management’s ability to fairly look out for creditor interests in these cases rather than the Ng family interests that control these companies through their ultimate shareholdings in Debtor N.S. Hong Investment (BVI); The Ng family interests likely conflict with the Debtors’ interests due to the extensive intercompany debts between the various debtor entities and non-debtor entities, which are massive and controlled by the same or similar management.”

The motion continues, “The Debtors have halted a sale process of the Debtors’ key asset, a Peruvian business, the sale of which would generate proceeds to repay the Club Lender Parties and other creditors; The Debtors have not identified any plan or strategy for moving forward in these cases beyond simply delaying any sale and stretching out creditors for several years while avoiding meaningful independent fiduciary oversight and waiting for the weather to change and the global economy to improve…and already in these cases, critical financial creditors have offered to forebear and provide funding to permit these cases to move forward and to enable a liquidity event to occur for the Debtors’ main asset; yet, the Debtors have rejected this opportunity, choosing instead to pursue this litigation.”

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