Inter-Pacific Petroleum Pte Ltd (in liquidation) v Goh Jin Hian [2024] SGHC 178

In what could be seen as a wake-up call, the High Court of Singapore clarified the scope of director’s duties in Singapore, emphasizing the minimum standard of care required.

Background

Introduction

When a company enters financial trouble, the Singapore restructuring and insolvency framework provides a number of avenues through which the rights of the company's creditors may be addressed. Amongst these avenues, receivers may be appointed pursuant to an instrument to enforce a secured creditor's rights. Judicial managers may also be appointed by the Court to manage the business and assets of the company.

Introduction  

In Aathar Ah Kong Andrew v OUE Lippo Healthcare Ltd [2021] SGCA 48, the Singapore Court of Appeal has struck out an appeal against a bankruptcy decision, thus bringing to a close the latest chapter in a long-running bankruptcy and voluntary arrangement dispute. The Court's decision highlights the importance of complying with the procedural requirements of bankruptcy proceedings and appeals, including observing the relevant timelines and obtaining the prior sanction of the Official Assignee ("OA").

Like most companies that file for chapter 11 protection, many debtors in the health care industry may have outstanding liabilities that have not been finally adjudicated as of the petition date. This can include tort claims based on allegations of medical malpractice, elder abuse, patient dumping, violations of a patient’s bill of right or various other allegations of improper care. Bankruptcy courts can estimate the value of these claims to facilitate the speedy confirmation of a debtor’s plan without subjecting the debtor to a lengthy trial during its restructuring.