In the recent decision of Foo Kian Beng v OP3 International Pte Ltd (in liquidation) [2024] SGCA 10 (dated 27 March 2024), the Singapore Court of Appeal upheld a director’s breach of duty by authorising the payment of a dividend and the repayment of a loan to himself. The decision, considering Sequana, sheds further important light on the directors’ duty to consider or act in the interest of the company’s creditors, coined as “creditor duty”.

The Facts – Briefly Stated

When an employer is insolvent and administrators appointed, job losses are often an inevitable consequence. In this blog we look at the legal obligations arising where redundancies meet the threshold for collective consultation, and the implications for administrators arising out of the recent Supreme Court in the case of R (on the application of Palmer) v Northern Derbyshire Magistrates Court and another.

When does the legal obligation to collectively consult apply?

The Facts – Shortly Stated

In this Article, José-Antonio Maurellet SC (a member of DVC and an Associate Member of 3 Verulam Buildings) and Michael Lok discuss the landmark decision just handed down by the Supreme Court of the United Kingdom in BTI 2014 LLC v Sequana SA and others 

In this article, Jose Maurellet SC and Michael Lok consider a recent judgment by Aedit Abdullah J of the Singapore High Court exploring issues arising out of the Model Law, including how and when the presumptive COMI may be displaced and whether a publicly held real estate investment trust falls within the scope of COMI.

In Nuoxi Capital Ltd v Peking University Founder Group Co Ltd [2021] HKCFI 3817, Mr Justice Harris held that keepwell disputes should be determined in Hong Kong in accordance with the contractual exclusive jurisdiction clause, notwithstanding the Court recognising the keepwell provider’s Mainland insolvency proceedings.

Test for risk of dissipation

On 24 February, the Government published draft regulations that, if implemented, will impose new restrictions on pre-pack administration sales to connected parties. For all `substantial disposals' (which will include `pre-pack' sales) to connected parties, taking place within eight weeks of the administrators' appointment, the administrators will either need creditor consent or a report from an independent `evaluator'.

Context

In the landmark case of Re China Huiyuan Juice Group Limited [2020] HKCFI 2940, Mr Justice Harris recalibrated the Hong Kong winding-up jurisdiction and its application to an offshore incorporated, Hong Kong-listed entity.

In particular, the decision explains why the Hong Kong court may be unable to wind up an offshore incorporated, Hong Kong-listed company where all of the company’s operating assets are in the Mainland.

The material facts

In recent years, it has become increasingly common for companies seeking to avoid an immediate winding-up order, particularly listed companies, to pray in aid of alleged efforts to restructure its debts in a bid to obtain adjournments of a winding up petition.