Introduction
The law is constantly developing to fit the ever-changing world. Most recently, with the digitalisation of the commercial landscape and the proliferation of cryptocurrencies, NFTs and metaverse-related businesses, the courts have had to apply or adapt the law to deal with novel situations. This was the case in Re Babel Holding Ltd and other matters [2023] SGHC 98, where the Singapore High Court had to apply restructuring and insolvency law in the context of a cryptocurrency-related business.
Introduction
Introduction
The success of a scheme of arrangement in restructuring depends largely on the consent of the requisite statutory majority of the scheme creditors. To incentivise the creditors to commit to the proposal at an early stage, scheme companies may seek to enter into a lock-up agreement with the creditor, in which the creditor provides an undertaking to vote in favour of the scheme in exchange for certain benefits, such as consent fees.
Introduction
The Ministry of Law ("MinLaw") has announced that the application period for the Simplified Insolvency Programme ("SIP") has been extended to 28 July 2022. The application period was originally set at six months (from 29 January 2021 to 28 July 2021). However, in light of the continued challenges in the business environment arising from the COVID-19 pandemic, MinLaw has extended the application period for another year.
Simplified Insolvency Programme
Introduction
In order to preserve a bankrupt's assets for distribution to creditors, any disposition of the bankrupt's property from the date of the bankruptcy application is considered void. However, this position is not absolute – the Court may consent to or ratify the disposition. In Sutherland, Hugh David Brodie v Official Assignee [2021] SGHC 65, the Singapore High Court set out the applicable principles that it would take into account when considering whether to ratify such disposition.
Introduction
The Insolvency, Restructuring and Dissolution Act 2018 ("IRDA") allows a company proposing or intending to propose a scheme of arrangement to its creditors to apply to the Singapore High Court ("Court") for a moratorium restraining proceedings against the company. The Court may also extend the moratorium on application to cover a subsidiary or holding company. This is to allow the company some breathing room to conduct its restructuring efforts.
A scheme of arrangement is an important avenue for a company under financial stress to compromise debts owed to specified categories of creditors. In broad terms, there are four steps to a scheme. The first step is to determine which creditors are to be covered under the scheme, categorize them, and to seek leave from the High Court to convene a meeting of each category of creditors. The second step is to hold and pass the appropriate resolutions at the meeting(s) of creditors. The third step is to obtain the sanction of the High Court of the scheme.