Businesses worldwide are feeling the pressure of historic inflation and rising interest rates. UK insolvencies have reached their highest level since 2009, while numbers are also increasing in Australia, Canada and China.

This article examines the latest restructuring and insolvency trends – including zombie companies, landmark court decisions, and new legislation in Canada and the EU.

‘Zombie companies’ could lead to a wave of insolvencies

Introduction

Restructuring and insolvency proceedings often span different jurisdictions, requiring the cooperation of the respective countries' insolvency regimes. In its role as an international hub for restructuring and insolvency, Singapore has in place a framework for the effective management of cross-border insolvency proceedings. This takes the form of the UNCITRAL Model Law on Cross-Border Insolvency, which has been enacted in Singapore in an adapted form ("SG Model Law").

Introduction

The Insolvency, Restructuring and Dissolution Act 2018 (2020 Rev Ed) ("IRDA") allows companies intending to propose a scheme of arrangement to apply to court for a moratorium, during which proceedings against the company would be restrained so as to allow breathing room for its restructuring efforts. To balance this with the safeguarding of creditors' interests, there are certain requirements for an application for a moratorium.