Summary
The role of the liquidator is to realise the assets of the company and from the sale proceeds, pay off creditors of the company. If a difficulty arises in the course of his administration of the winding up, the liquidator may apply to the winding up court for directions.
It has often been said that the route of winding up a company is the remedy of last resort in a creditor’s odyssey to recover a debt owed to it. This is as not only would the granting of a winding up order have drastic repercussions for the debtor company, but there is also no guarantee that the creditor would be able to recover the full debt thereafter.
“Rather fail with honour than succeed by fraud” – Sophocles
Introduction
Fraud and its impact on businesses are an increasing concern. The costs of addressing the consequences of fraudulent conduct are growing exponentially and fraudulent schemes are becoming more prevalent, sophisticated and even international.
Introduction
In the recent case of Atlas Equifin Pte Ltd v Electronic Cash and Payment Solutions (S) Pte Ltd (Andy Lim and others, non-parties) [2022] SGHC 258 (“Atlas Equifin”), the Singapore High Court had the opportunity to consider the unexplored issue of whether shareholders/ contributories have legal standing to oppose a creditor’s winding up application.
Facts
Introduction
On 5 October 2022, the UK Supreme Court delivered its long-awaited judgment in BTI 2014 LLC v. Sequana SA and others [2022] UKSC 25 ("Sequana Case") which concerns the question of the trigger point when directors must have regard to the interests of creditors ("Creditor Duty"). This case raised questions of considerable importance for Malaysian company law.
Rabindra S Nathan, Shearn Delamore & Co
This is an extract from the 2023 edition of GRR's The Asia-Pacific Restructuring Review. The whole publication is available here.
In summary
Introduction
The High Court on 25 May 2022, allowed the judicial management order applications (“JM Applications”) filed by three wholly-owned subsidiaries of Jerasia Capital Berhad (“JCB”), namely Jerasia Apparel Sdn Bhd (“JASB”), Jerasia Fashion Sdn Bhd and Canteran Apparel Sdn Bhd (“CASB”) (collectively the “Applicants”).
Introduction
In this day and age where loans, mortgages, and other forms of financial assistance are frequently sought by persons who have been hard-hit by the Covid-19 pandemic, one may wonder as to what happens when one passes away and has yet to settle their liabilities. A more curious question which infrequently arises in the minds of most people is, what are the consequences if these liabilities exceed their assets when they pass away?
What's this Update about?
In the recent decision of the Malaysian High Court in Re Top Builders Capital Bhd & Ors [2022] MLJU 1 ("Top Builders"), Ong Chee Kwan JC reaffirmed certain principles for the sanction of a scheme of arrangement ("SOA") and also decided on some novel issues:-
- Introduction
We have seen many businesses strive to navigate through the financial constraint due to the COVID-19 pandemic. One of the factors that affects companies’ cashflow is the outstanding payment due from another party (debtor). Collecting receivables would be troublesome and parties would eventually resort to legal recourse. In this situation, it is important for debt collectors to understand how the legal debt recovery process works in Malaysia in order to enforce their rights.