The recent Singapore case of Re Lehman Brothers Finance Asia Pte Ltd (in creditors' voluntary liquidation) determined that the debts of a company in foreign currency, which had been admitted in proof by the liquidators, were to be converted at the exchange rate prevailing at the "resolution date". In this context, resolution date means the day the resolution was passed placing the company into liquidation.

Introduction

The Singapore High Court has confirmed that it will recognize the status and powers of a foreign liquidator in the liquidation of an unregistered foreign company in Singapore.

Life cycle of a company

Statistics from the Accounting and Corporate Regulatory Authority ("ACRA") of Singapore reveal that the increasing number of companies formed in Singapore (2004:17,151; 2009:26,414) is matched by a corresponding increase in the number of companies ceasing operations (2004:5,882; 2009:22,388).

In Larsen Oil and Gas Pte Ltd (in official liquidation in the Cayman Islands and in compulsory liquidation in Singapore) [2011] SGCA 21, the Singapore Court of Appeal endorsed, and elaborated on, the stance taken by the High Court concerning the relationship between arbitration and insolvency

In Larsen Oil and Gas Pte Ltd v Petroprod Ltd (in official liquidation in the Cayman Islands and in compulsory liquidation in Singapore) [2011] SGCA 21, the Singapore Court of Appeal endorsed, and elaborated on, the stance taken by the High Court concerning the relationship between arbitration and insolvency.

Where a contract contains a non-assignment clause, a liquidator may not, as part of his liquidation of an insolvent company's assets, assign the contract to a third party without first seeking the consent of the contracting counterparty:

-- Owners of Strata Plan 5290 v CGS & Co Pty Ltd (Australia, New South Wales, Court of Appeal, 30 June 2011)

A winding up application may be resisted by reason of a cross-claim against the petitioning creditor.

The case of Norwest Holdings Pte Ltd (in liquidation) v Newport Mining Ltd [2010] SGHC 144 involved
the sale of the shares of a company which owned phosphate mining and production facilities in the
Sichuan province.

Payments made by a company to its holding company shortly before its winding up were held to have amounted to an unfair preference of the holding company and could be clawed-back from it

The Singapore High Court has considered for the first time whether an action brought to avoid transactions that allegedly violated insolvency laws should be stayed in favour of arbitration. The court held that such disputes are not suitable for arbitration due to the public interest involved.

The Singapore Court of Appeal decision of Chee Yoh Chuang & Anor (as Liquidators of Progen Engineering Pte Ltd (in liquidation)) v Progen Holdings Ltd considered how the lawought to balance the rights of creditorswith the companies directors' desire to keep the company afloat when the company has financial difficulties and when payments were made to creditors.