Ogier secures BVI ruling setting aside US$125.9 million repayment as an unfair preference

The Honourable Justice Gerhard Wallbank KC [Ag.] of the Commercial Division of the High Court of Justice of the Virgin Islands has handed down his judgment in the case of Luke Almond & So Kit Yee Anita (as Joint Liquidators for Tsinghua Unigroup International Co., Ltd (In Liquidation)) v Linxens Holding SAS BVIHC(COM) 2023/0177.

Ogier's BVI Dispute Resolution team has successfully acted for Luke Almond and So Kit Yee Anita of Ernst & Young (the Joint Liquidators) in their application to set aside a partial loan repayment of US$125.9 million, made by Tsinghua Unigroup International Co., Ltd (In Liquidation) (TUI) to Linxens Holding SAS (Linxens), a connected group company, in accordance with sections 245 and 249 of the Insolvency Act 2003.

Ogier’s Dispute Resolution experts in Hong Kong and the BVI also acted for the Joint Liquidators in the successful restructuring of the US$450 million Keepwell Bonds.

Case background

The proceedings concerned TUI, a BVI company that guaranteed the US$450 million Keepwell Bonds issued by its wholly owned subsidiary, Unigroup International Holdings Ltd (In Liquidation) (UIH), in 2015 and 2016. The bonds were due to mature on 10 December 2020. Under the guarantee, TUI was obliged to repay the principal and interest if UIH failed to do so. TUI and UIH were part of the Tsinghua Unigroup group of companies, with TUI serving as the group’s main financing company.

On 9 September 2020, Linxens loaned EUR70 million and US$95 million to TUI at the group's request. The loan was initially due to be repaid on 9 September 2021. However, TUI made a partial repayment of US$125.9 million to Linxens, on 7 December 2020, three days before the UIH bonds were due to mature. On 9 December 2020, it was announced on the Hong Kong Stock Exchange that neither UIH nor TUI would be able to make the payment of the outstanding principal and interest that was due on the bonds the following day.

The Joint Liquidators were appointed over TUI and UIH on 16 November 2022, following the appointment of provisional liquidators on 25 April 2022. The claim against Linxens was filed in September 2023.

A novel judgment

Following a three-day trial concluding in October 2025, the Honourable Justice Wallbank handed down judgment granting the Joint Liquidators' application to set aside the payment to Linxens as an unfair preference. 

The comprehensive judgment evaluates the evidence of four factual witnesses and two expert witnesses and is the first written judgment in the BVI to consider the law on unfair preference claims in detail, in particular, the test for cashflow insolvency and the ordinary course of business defence.

Wallbank J found that TUI was "plainly hopelessly cashflow insolvent" as at 7 December 2020, and that the payment to Linxens "was positively intended to frustrate other, external, creditors' rights in the likely imminent event of TUI's insolvency following default upon its Bond obligations".

The Ogier team was led by partner Sarah Latham, with associate David Lim, and alongside leading counsel Richard Fisher KC, with Jon Colclough, both of South Square Chambers, London.

Ogier's expertise

Ogier has one of the largest Dispute Resolution teams in our worldwide jurisdictions, advising on technical, strategic and procedural aspects across the spectrum of contentious commercial issues and disputes.

Our cross-practice restructuring and insolvency experts bring their creativity, knowledge and experience to provide a practical perspective on rapidly evolving cross-border assignments. For further insights or tailored legal advice, contact a member of our team.