The new Law on Consensual Financial Restructuring (“Official Gazette of RS“ No. 89/2015) which came into effect on November 4, 2015, began to be applied on February 3, 2016. As opposed to the previous Law on Consensual Financial Restructuring from 2011, which did not deliver the expected results with regard to decreasing number of irrecoverable debts, the new Law establishes a better legal framework for voluntary debt restructuring in Serbia.
In situations when financing is tight, such as during recessions, corporations face difficulty refinancing existing debt or capitalising their businesses.
When faced with such realities, distressed corporations often turn to M&A transactions as a means of generating capital and exiting from non-performing businesses. In such situations, M&A transactions typically take the form of asset sales rather than mergers or share sales.
Background
Pars Ram Brother (Singapore Company) obtained trade financing facilities from various banks, and pledged the goods financed by each bank under a pledge arrangement as security.
The Singapore Company entered into voluntary liquidation. The liquidator discovered that the Singapore Company had mixed the goods making it impossible to identify which goods were financed by which bank.
Issue
In its recent decision in Pars Ram Brothers (Pte) Ltd (in creditors’ voluntary liquidation) v Australian & New Zealand Banking Group Ltd and others [2017] SGHC 38, the Singapore High Court held that the security interests of lenders survived the commingling of assets, and that the assets should be divided among the secured lenders in proportion to their respective contributions.
Facts
Introduction
Selvam LLC, the Singapore Law Practice of Duane Morris & Selvam LLP, recently succeeded in securing the dismissal of a suit brought by a liquidator in the High Court of Singapore against a defendant director in Prima Bulkship Pte Ltd (In Creditors’ Voluntary Liquidation) and Another v Lim Say Wan And Another [2016] SGHC 283.
In Brief
For the first time, a court has adopted the ‘centre of main interest’ (COMI) as grounds at common law to recognise foreign insolvency proceedings.
The decision earlier this year by the High Court of Singapore (the Court) recognised a Japanese bankruptcy trustee appointed to companies incorporated in the British Virgin Islands (BVI):
Introduction
A case study of W Y Steel Construction Pte Ltd v Tycoon Construction Pte Ltd (in liquidation) [2016] SGHC 80
Overview
Counterparties of Swiber Holdings Limited ("Swiber") and its group companies would do well to keep a close tab on any debts outstanding from the group.
Swiber, an SGX-listed company in the oil fields services sector, issued an announcement in the early hours of Thursday 28 July 2016 stating that it filed an application in the Singapore High Court for a voluntary winding up on Wednesday afternoon, together with an application to place the company under provisional liquidation.