Introduction

On 12 November 2025, the Federal Court delivered an important judgment that brings much-needed clarity to the powers, responsibilities, and protections available to liquidators acting under the Companies Act 2016 ("CA 2016").

The decision provides authoritative guidance on what constitutes "costs and expenses of winding up" under section 527(1)(a), and on the high threshold applicable to efforts to remove or sue a liquidator.

Brief background

Introduction

The Federal Court has recently delivered a decision in the case of Victor Saw Seng Kee v Wong Weng Foo & Co; London Biscuits Berhad (In Liquidation) (Civil Appeal No.: 02(f)-61-12/2024) ("London Biscuits"), addressing four important questions of law. This ruling provides clarity on the powers of liquidators, the role of creditors in appointing liquidators, and the treatment of employee-related payments during winding up.

Background and Procedural History

Introduction

Introduction

A. Introduction

The Model Law on Cross-Border Insolvency (“Model Law”) was adopted by the United Nations Commission on International Trade Law (UNICITRAL) in 1997. It was designed to assist countries in equipping their insolvency laws with a modernised and harmonised legal framework to effectively address cross-border insolvency and restructuring cases.

Introduction

The Cross-Border Insolvency Bill 2025 ("Bill") passed its first reading on 28 July 2025 in the Dewan Rakyat. The Bill has since passed its second and third reading in the Dewan Rakyat on 29 July 2025. The legislation aims to align Malaysia with the UNCITRAL Model Law on Cross-Border Insolvency ("Model Law"), establishing a clear legal framework for managing multi-jurisdictional corporate insolvency cases.

Background and Legislative Intent

Introduction

An amalgamation or reconstruction of companies under sections 366 and 370 of the Companies Act 2016 ("CA 2016") is a common tool for corporate restructuring in Malaysia. It enables the seamless transfer of assets and liabilities from the transferor to the transferee, typically within group structures where both companies share a common ultimate holding company.

Background

Introduction and Brief Facts

The Kuala Lumpur High Court recently dismissed an application for a judicial management order and in its decision introduced procedural safeguards to prevent the abuse of the judicial management process.

A distressed merger and acquisition (“M&A”) is essentially a sub-category of a conventional M&A, which involves sales of shares or assets of companies that are in financial turmoil and these companies are being placed under administration, receivership and/or liquidation. Due to the unprecedented Covid-19 pandemic, distressed M&A transactions have become more common in recent years with companies in financial and operational distress looking to dispose of their assets to better manage high illiquidity as well as reducing over-indebtedness risk.