After receiving the Royal Assent on 10 May 2017, the Bankruptcy (Amendment) Bill 2016 (Bill) has finally come into force in Malaysia on 6 October 2017, marking the dawn of the new Malaysian Bankruptcy regime.

As highlighted in our previous November 2016 Client Alert, the Bill will rename the existing Bankruptcy Act 1967 to the Insolvency Act 1967 and will also have important implications, specifically to financial institutions and corporates whose loans / debts are secured by personal guarantees.

On 21 November 2016, the Bankruptcy (Amendment) Bill 2016 (Bill) was tabled in Parliament. The Bill will rename the Bankruptcy Act 1967 to the Insolvency Act 1967 and will have important implications, in particular to financial institutions and corporates whose loans / debts are secured by personal guarantees, once their amendments are incorporated in the existing Bankruptcy Act 1967 (Act) and are passed and in force.

The recent reform of the Bankruptcy Act (operated under RD 11/2014 dated September 5, 2014) intended to extend the bankruptcy agreement modifications in favor of the pre-insolvency restructuring and refinancing agreements which were introduced in March 2014.

The reform has a special provision for privileged creditors with warranties subject to specific valuation formulas, to be adjusted to the actual financial value of the guaranteed credit. Any portion of debts that exceed this value will not be considered as privileged, but will be ordinarily classified.

The Spanish Supreme Court has established the legalconcept of insolvency as an objective requirement forthe Declaration of Insolvency pursuant to Section 2.1 ofthe bankruptcy Act by virtue of the decision taken by the Court on April 1, 2014.

Introduction

Introduction

Introduction

Introduction

Introduction

Introduction