Recent Developments

Introduction

Welcome to the 3rd edition of Going Concerns where we strive to bring you the latest updates on restructuring and insolvency law. In this issue, we provide:

1. An update on the extent of financial disclosure that may be ordered against a company undergoing a scheme moratorium under s. 211B(6) of the Singapore Companies Act (Cap. 50);

2. A further commentary on the Insolvency, Restructuring and Dissolution Bill; 3. A commentary on the Singapore recognition process of foreign bankruptcies;

Dominic Emmett and Hannah Cooper, Gilbert + Tobin

This is an extract from the first edition of GRR's The Art of the Pre-Pack. The whole publication is available here.

As the name suggests, the UNCITRAL Model Law on Cross-Border Insolvency 1997 (Model Law) seeks to address complexities caused where insolvencies cross borders, while leaving substantive insolvency laws of each country largely unaltered. However, as jurisdictions continue to adopt and interpret the Model Law, inconsistencies in its application are coming to light.

^{"Whenever there is change, and whenever there is uncertainty, there is opportunity."Mark Cuban, American businessman and investor}

In the current global market, very few things are clear other than that volatility and change are ever-present.

Forum bias, along with some technical issues, are still challenges in cross-border insolvencies in Australia

Just over ten years ago, Lehman Brothers filed for bankruptcy in the US, which turned out to be one of the largest cross-border insolvency cases in history.

Last year also marks:

The Australian Federal Court has clarified the limitations for foreign entities and their office holders in pursuing action in Australia to access the voidable transaction provisions of the Australian Corporations Act.

King (Trustee); In the matter of Zetta Jet Pte Ltd v Linkage Access Limited [2018] FCA 1979 is the latest in a series of decisions, across multiple proceedings, dealing with the dogged attempts of a United States bankruptcy trustee to recover a luxury yacht moored in Australian waters.

What you need to know

The Federal Court – in a much-litigated wider contest about the ownership of the luxury yacht, "Dragon Pearl" drifting in an intriguing cross-border insolvency – has clarified the limitations for foreign entities and their insolvency appointees in pursuing action in Australia to un-wind antecedent transactions (by attempting to use the voidable transaction provisions of the Australian Corporations Act).

Insolvency and restructuring professionals need to know:

UNCITRAL has recently published its Model Law on Recognition and Enforcement of Insolvency-Related Judgments (MLREIJ), with a recommendation that nations adopt it into their domestic law. You can find a complete copy of the text of MLREIJ here (on the UNCITRAL website).