Tai Pan Bakery Linked Company Ordered to Repay HSBC HK$26.2M in Mortgage Ruling
SingTao · 2 SOURCESabout 2 hours ago5 MIN
Summary
The High Court has ruled in favor of HSBC Hong Kong in a mortgage enforcement case against Fuge Limited, a company connected to the collapsed Tai Pan Bread & Cake chain. Judge Au Yeung Kwai-yu ordered Fuge to repay HK$26.2 million with interest and surrender three units at Luk Hop Industrial Building that served as collateral. Fuge had argued it only intended to provide a temporary guarantee until March 31, 2024, but the court found the guarantee was unconditional. This ruling comes after Tai Pan's founder, Kwok Hung-kwan, sold the business to businessman Liu Zhiqiang in 2021, who was later declared bankrupt in 2025.
Key Points
- Tai Pan Bread & Cake, Hong Kong's iconic bakery chain founded in 1984 and known for inventing snow skin mooncakes, closed all stores in June 2025 after 41 years of operation
- Fuge Limited (formerly Tai Pan阁 Development Limited) entered into three mortgage loan agreements with HSBC using three Luk Hop Industrial Building units as collateral between 1998 and 2022
- HSBC claimed over HK$56 million from Fuge after Tai Pan's closure, having already deducted HK$30.98 million from Fuge's accounts and received an additional HK$30.17 million payment in August 2026
- Fuge argued its former solicitor failed to communicate that it only intended a limited guarantee for Liu Zhiqiang's operation of Tai Pan until March 2024
- Judge Au Yeung ruled the guarantee contract was between Fuge and Liu, not involving HSBC, and Fuge's own April 2024 letter acknowledged the mortgage remained valid
Why It Matters
The ruling establishes that corporate guarantees cannot be unilaterally limited without the creditor's consent, potentially affecting how financial institutions structure and enforce similar arrangements. The case also highlights the legal aftermath of Tai Pan's collapse, with creditors pursuing related parties to recover debts after the bakery chain's sudden shutdown.
The ruling establishes that corporate guarantees cannot be unilaterally limited without the creditor's consent, potentially affecting how financial institutions structure and enforce similar arrangements. The case also highlights the legal aftermath of Tai Pan's collapse, with creditors pursuing related parties to recover debts after the bakery chain's sudden shutdown.