September 19, 2020

Cayman Islands Court Issues Order to Acorn (ATV) SHareholder


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From StreetInsider

On October 14, 2014, the Grand Court of the Cayman Islands (the “Cayman Islands Court”) issued an order (“Order”) relating to the petition (the “Petition”) presented by Acorn Composite Corporation (a shareholder of Acorn International (NYSE: ATV) controlled by Mr. Robert W. Roche, a director of the Company) to the Cayman Islands Court on September 29, 2014.

As previously disclosed in the Company’s Form 6-K furnished to the Securities and Exchange Commission on October 1, 2014, the Petition seeks to have a winding up order be made against Acorn International, Inc. (the “Company”). As an alternative to a winding up order, the Petition requests that the Cayman Islands Court exercise its jurisdiction to (i) direct the Company to call an extraordinary general meeting (“EGM”) so as to allow all of the shareholders and ADS holders of the Company to consider and vote on (a) a resolution to approve the removal of Messrs. Andrew Y. Yan, Don Dongjie Yang, Gordon Wang and Jing Wang as directors of the Company, and to approve the appointment of Messrs. Benjamin Johnson, David Leung, Yue-Sai Kan and Jong-Guang Pan as directors of the Company, and (b) a resolution to amend the Company’s memorandum and articles of association to allow shareholders who are holding not less than 30% of the issued ordinary shares in the Company to convene an EGM unilaterally; and (ii) require the Company to refrain from pursuing any share issuance until such further order of the Cayman Islands Court or approval of the shareholders of the Company following an EGM.

Upon the request of Acorn Composite Corporation and with the agreement of D. Y. Capital, a shareholder of the Company controlled by Don Dongjie Yang, the Company’s CEO and the chairman of its board of directors, and SB Asia Investment Fund II L.P., a shareholder of the Company controlled by Andrew Y. Yan, a director of the Company, the Cayman Islands Court has stipulated in the Order that the Petition is to be treated as an inter partes proceeding between Acorn Composite Corporation, D.Y. Capital and SB Asia Investment Fund II L.P., and is not to be treated as a proceeding against the Company. Under the Order, the Company is to be treated as the subject matter of the Petition but shall be neutral as to its direction and outcome, giving such assistance to the Cayman Islands Court as the Cayman Islands Court may direct.

The Order also stipulates that any other shareholder of the Company wishing to be heard on the Petition must give the Cayman Islands Court notice of his, her or its intention no later than December 3, 2014.

Under the Order, pending the determination of the Petition, certain specified actions taken by the Company shall be void unless specific leave is granted by the Cayman Islands Court or such matters are approved by an ordinary resolution of the shareholders of the Company, including actions which would materially impact the financial position and/or operations of the Company and its subsidiaries, issuing new share capital, declaring dividends, selling its or its subsidiaries’ assets, taking actions which result in the failure on the part of the Company or any of its subsidiaries to honor existing contracts or commercial arrangements currently in place, and entering into new contracts.

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