The Act is a groundbreaking development in Singapore's corporate rescue laws and includes major changes to the rules governing schemes of arrangement, judicial management, and cross-border insolvency. The Act also incorporates several features of chapter 11 of the U.S. Bankruptcy Code, including super-priority rescue financing, cram-down powers, and prepackaged restructuring plans. The legislation may portend Singapore's emergence as a center for international debt restructuring.

On 2 March Cambridgeshire-based merchant WellGrain went into administration, reportedly owing at least £15m to almost 300 creditors, many of those being farmers.

The administrators' report has now been published and indicates that the unsecured creditors - including some 155 farmers - will expect to receive between 1.4 - 6.7 pence for every pound they are owed.

It is an announcement which will no doubt be met with dismay by those creditors. However, it is not unusual that unsecured creditors of an insolvent company will receive little or no payment.

The procedure for an application to Court for the appointment of an Administrator pursuant to paragraph 12 of Schedule B1 IA 86 is covered by r3.3-3.15 of the 2016 rules.

Key points to note:

The procedure for Debt Relief Orders ("DRO") is unchanged, possibly because it is a comparatively new process having only come into force in 2009. However there has been some shuffling of rules numbers, in an effort to regularise and make the structure more logical.

Eligibility

To be granted a DRO, the debtor:

Section 216 continues to apply to prohibit the re-use of a name or sufficiently similar name where oldco and newco have common directors.

The relevant rules now dealing with the exceptions are contained in new rules 22.1 - 22.7.

The three exceptions remain broadly the same but there are some key differences to note.

Exceptions to the prohibition

The Appeals process is governed by Rules 12.59; 12.61 and Schedule 11. The old corresponding provisions were Rules 7.47 and 7.49A.

The major change to the provisions is that there is now clarification on appealing decisions made by District Judges. The new rules provide that these appeals will now lie either to a High Court Judge in a District Registry or a Registrar in Bankruptcy at the High Court. This was previously the case, but was only inserted into the old rules by way of an Amendment - they now come fully under the scope of the rules.

The out of Court appointment processes are broadly similar to the processes under the Insolvency Rules 1986 with some minor amendments. The most significant change is the abolition of the prescribed forms for appointment documents.

Whatever type of appointment (out of Court by company/directors, out of Court by Qualifying Floating Charge Holder ("QFCH"), application to Court), the Consent to Act form and contents is dealt with by r3.2.

Appointment out of Court by directors/the Company

In Short:

The Action: Courts in Singapore and the states of New York and Delaware have formally implemented Guidelines for Communication and Cooperation between Courts in Cross-border Insolvency Matters.

The Motivation: The Guidelines were developed to improve the efficiency and effectiveness of cross-border insolvency proceedings and to encourage coordination and cooperation among relevant courts.

Looking Ahead: Expect the Guidelines to be implemented in other significant jurisdictions.

On March 10, 2017, Singapore's Parliament approved the Companies (Amendment) Bill 2017 ("Act") to enhance the country's corporate debt restructuring framework. The Act was assented to by President Tony Tan Keng Yam on March 29, 2017, and became effective after it was published in the Singapore Government Gazette on March 30, 2017.

Applications

Rule 12 sets out rules relating to applications, (excluding administration applications, winding up petitions and creditors' bankruptcy petitions) including: