Summary

The role of the liquidator is to realise the assets of the company and from the sale proceeds, pay off creditors of the company. If a difficulty arises in the course of his administration of the winding up, the liquidator may apply to the winding up court for directions.

Introduction

On 5 October 2022, the UK Supreme Court delivered its long-awaited judgment in BTI 2014 LLC v. Sequana SA and others [2022] UKSC 25 ("Sequana Case") which concerns the question of the trigger point when directors must have regard to the interests of creditors ("Creditor Duty"). This case raised questions of considerable importance for Malaysian company law.

What's this Update about?

In the recent decision of the Malaysian High Court in Re Top Builders Capital Bhd & Ors [2022] MLJU 1 ("Top Builders"), Ong Chee Kwan JC reaffirmed certain principles for the sanction of a scheme of arrangement ("SOA") and also decided on some novel issues:-

Introduction

Commercial transactions and disputes are increasingly likely to contain a cross-border element. As such, the ability of Courts to cooperate on the management of proceedings that span their respective jurisdictions will facilitate the efficient resolution of cross-border issues. In this regard, the Singapore and Malaysia Courts have demonstrated a commitment to judicial cooperation between the two countries.

In the recent decision of the Malaysian High Court in Re Top Builders Capital Bhd & Ors [2021] 10 MLJ 327("Top Builders"), Ong Chee Kwan JC examines the proof of debt exercise in a scheme of arrangement ("SOA") and the guiding principles governing the granting of leave to proceed with legal proceedings against a financially distressed company that has obtained a restraining order (moratorium) pursuant to a SOA.