International Pte Ltd [2024] SGCA 10 is a landmark case by the Singapore Court of Appeal that sets the test for how Singapore courts should in future approach the question of directors duties when a company is facing financial difficulties. It makes clear that the financial state of the company is an important consideration which a director should bear in mind, as it is the indicia of a shift in the economic interests in the company from the shareholders to the creditors.

Key takeaways

A three-judge panel of the U.S. Court of Appeals for the Fifth Circuit has voided its previous near explicit declaration that make-whole provisions are always unmatured interest, and therefore subject to disallowance under section 502(b) of the Bankruptcy Code in Ultra Petroleum.

In Heince Tombak Simanjuntak & Ors v Paulus Tannos & Ors (2019), the Singapore High Court granted recognition of Indonesian bankruptcy orders made against the four respondents, each of whom is an Indonesian citizen. This allows the applicants to administer the respondents’ property in Singapore. The case provides banks with the assurance that bankruptcy orders obtained in Indonesia may be enforced in Singapore.

A recent decision from the United States District Court for the Southern District of New York, In re Tribune Co. Fraudulent Conveyance Litigation, Case No. 12-2652, 2019 WL 1771786 (S.D.N.Y. April 23, 2019) (Cote, J.), has re-examined application of the “securities safe harbor” under section 546(e) of the Bankruptcy Code, 11 U.S.C. §§ 101–1532, to the transferees of “financial institutions” in so-called “conduit transactions,” following the United States Supreme Court’s 2018 decision in Merit Management Group, LP v. FTI Consulting, Inc., 138 S. Ct. 883 (2018).